An analyst believes Pudgy Penguins (PENGU) could be close to a big breakout based on this technical analysis (TA) pattern in its 4-hour chart.
A Bull Flag occurs when the pole is in the up direction and the flag corresponds to parallel consolidation to a net downside. When the price is trading inside the flag channel, it’s likely to face resistance at the upper line and support at the lower one. A move out of either of these levels can signal a breakout in that direction.
Bull Flags are assumed to be bullish continuation patterns, so a breakout may be more likely to occur above the resistance line of the parallel channel. Such a breakout is also considered to be of the same length as the pole of the pattern.
Now, here is the chart shared by Martinez that shows the Bull Flag that the 4-hour price of PENGU has been trading inside for the past month:
As displayed in the above graph, PENGU has slowly been descending within the channel of the Bull Flag. The memecoin recently made a retest of the upper level, but it ended up rejected. The asset has since faced a plunge, so it’s uncertain when the next attempt could occur. The longer the coin remains locked inside the channel, however, the likelier an escape could become, whether to the upside or downside.
In the view of the analyst, Pudgy Penguins is “inches away from a new leg up.” Going by the scale of the pole, a potential bullish breakout could send PENGU to near the $0.10 mark. It only remains to be seen how the cryptocurrency’s price will develop in the coming days and whether a surge above the Bull Flag will occur.
At the time of writing, Pudgy Penguins is trading around $0.317, down more than 7% over the last 24 hours.
