$SPY Bull Flag Potential Target Points

Yesterday, the SPY stock went through a significant market shift, transitioning from a bearish descending triangle to a bull flag breakout.

The Bull Flag

This Bull Flag pattern is a popular choice for traders as it is easy to identify and provides clear targets and stops. The pattern is created through a strong upward move of a few bullish candles or days followed by a consolidation and decline in a channel or “Flag”. Once it has broken out of the channel, it is a buy signal, starting the second leg up.

SPY Bull Flag

In SPY’s case, the Blue and Purple lines represent the Flag pole. The consolidation or channel occurred over the last two trading days, as this is the hourly chart. The breakout occurred at 3:00 yesterday breaking above 343.91. The blue and purple flags give us SPY next measured move or target levels. SPY can trade up from the breakout by 4 points with the blue line and 10 points with the pink line. Both moves put SPY right at resistance, with blue filling the gap at 438 and purple facing heavy resistance at 444.

With the upcoming CPI data, it could swing the market. If the bulls continue this pattern, these numbers are attainable and good profit-taking spots. However, if the market reacts bearish to the number, this pattern is voided below the ETF’s breakout level at 435.

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