Flag/Pennant patterns can be very rewarding, because the majority of the time, a breakout/breakdown is huge. Silver created this pattern and the tip off to its next big move was a breakdown of support in (OBV) On-Balance-Volume, which presented the case to short silver. (see post here)
The outcome of Silver breaking down from this flag/pennant pattern…Over a 30% decline in days!
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Friday the “Power of the Pattern” was suggesting that Silver should find intermediate support at the $27 level. (see post here) This created the target of where to cover shorts….when attemtping to score on defense you short at resistance and you harvest at support. During this sizeable breakdown ZSL (inverse Silver ETF) gained over 80% in a weeks time.
Flag patterns can be very friendly to your portfolio…ZSL picked up more in a week than the 500 index has made in 10 years!