Which of the following is a common application of the Measured Rule?

The Measured Rule is a tool used in technical analysis primarily for establishing price targets from chart patterns such as flags and pennants. This technique involves measuring the preceding move before the formation of the pattern and then projecting this distance from the pattern's breakout point to estimate where the price might go. It helps traders set realistic price expectations after the breakout occurs, which is essential for planning trades and managing risk effectively.

In the context of the other options, while they pertain to trading strategies, they do not align with the specific function of the Measured Rule. For instance, setting stop-loss orders relates to risk management and does not specifically utilize the measurements derived from chart patterns. Similarly, identifying overbought conditions typically involves oscillators or other indicators rather than a measurement of price movement itself. Charting longer-term price trends would focus more on trend analysis and moving averages rather than the precise price targets derived from specific chart patterns, which is the niche that the Measured Rule performs most effectively. Therefore, identifying price targets for flags and pennants is the most appropriate application of the Measured Rule.