- Bullish continuation chart pattern
- Follows a sharp upward move
- Flag should slope against the trend
- Flagpole : sharp almost vertical upward move
- Flag : 2 parallel trendlines, looks like a rectangle
- Flag usually appears at midpoint of the move
- Volume is lighter as the flag takes shape
- Breakout occurs on stronger volume
- Price target : height of the flagpole
Bearish Flag
- Bearish continuation chart pattern
- Follows a sharp downward move
- Flag should slope against the trend
- Flagpole: sharp almost vertical downward move
- Flag: 2 parallel trendlines, looks like a rectangle
- Flag usually appears at midpoint of the move
- Volume is lighter as the flag takes shape
- Breakout occurs on stronger volume
- Price target: height of the flagpole
Chart example below
