What is a bull flag?
Flag is a bullish pattern in the stock market or any other trading market that indicates that the stock is about to move higher
Bull Flag Pattern
Here’s how the flag pattern should look like
- First, there is a sharp market move, resembling almost a straight line (flagpole) on heavy volume.
- Prices pause for 1-3 weeks on light volume, forming a consolidation pattern.
- Prices break out and the trend resumes in the direction prior to the flag or pennant on heavy volume.
The Bull Flag pattern usually appear in the middle of a market move and, therefore, the move after the flag will travel the same distance of the move preceding the pattern.
The Flag
The flag is shown below, indicated by 2 parallel trendlines in the shape of a parallelogram, which tends to slope against the trend.
