AMD, Expedia, Lululemon All Form This Bullish Pattern: How To Trade The Break

Advanced Micro Devices, Inc (NASDAQ:AMD), Expedia Group, Inc (NASDAQ:EXPE) and Lululemon Athletica, Inc (NASDAQ:LULU) have all settled into bullish flag patterns on the daily chart. The bull flag pattern is created with a sharp rise higher forming the pole, which is then followed by a consolidation pattern that brings the stock lower between a channel with parallel lines.

• For bearish traders, the "trend is your friend" (until it's not) and the stock may continue downwards within the following channel for a short period of time. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.
• Bullish traders will want to watch for a break up from the upper descending trendline of the flag formation, on high volume, for an entry. When a stock breaks up from a bull flag pattern, the measured move higher is equal to the length of the pole and should be added to the lowest price within the flag.

A bull flag is negated when a stock closes a trading day below the lower trendline of the flag pattern or if the flag falls more than 50% down the length of the pole.

See Also: If You Invested $1,000 In AMD When It Unveiled Ryzen Lineup Of Processors, Here's How Much You Would Have Now

The Advanced Micro Devices Chart: On Oct. 7 AMD broke up from falling wedge, back tested the upper descending trendline of the pattern and on Oct. 12 began a 49.2% ascent to a Nov. 9 all-time high of $155.66. The stock has since consolidated the move to drop the relative strength index. The consolidation has settled AMD into a bull flag pattern with the pole created between Nov. 1 and Nov. 9 and the flag between Tuesday and Thursday.

The Expedia Chart: Expedia gapped up over 3% higher following its Nov. 4 earnings print. The stock then soared about 11% higher to reach a new all-time high of $191.85 and has spent the past three trading days consolidating the move, which has settled the stock into a bull flag pattern.

Although the bull flag may still be recognized, because it hasn’t lost support of the eight-day exponential moving average (EMA), traders should note Expedia has also created a bearish double top pattern at the all-time high that could be recognized.

The Lululemon Chart: Lululemon reversed into an uptrend on Oct. 12 and has created a series of consistent higher highs and higher lows on the daily chart. The stock hit a Nov. 4 all-time high of $478.66 and has spent the past five trading days consolidating the move.

Like AMD, the rise paired with the consolidation has settled Lululemon into a bull flag pattern on the daily chart, although traders should be aware the stock likely needs to regain the eight-day EMA for the pattern to be recognized.

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