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Bull Flag Pattern

The bull flag is a bullish continuation pattern that forms after a strong upward move (the flagpole). The flag portion is a brief consolidation that slopes slightly downward or sideways before the trend continues higher.

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Key Characteristics

1
Sharp upward move forms the flagpole
2
Consolidation slopes down or sideways
3
Flag portion is parallel channel
4
Volume decreases during flag formation
5
Breakout with volume resumes uptrend
6
Target equals flagpole length
7
Forms quickly (1-4 weeks typically)
8
Appears after strong momentum

Trading Tips

  • Enter on breakout above flag resistance
  • Stop-loss below the flag's low
  • Target is flagpole length added to breakout
  • Best in strong trending markets

Signal Strength & Reliability

Bull flags have a high success rate (65-75%) because they form during strong trends. The pattern shows healthy profit-taking before the trend continues. More reliable when the flagpole move was on high volume and the flag has low volume.

Bull Flag FAQs

Common questions about the bull flag pattern

Bull flags have parallel trendlines forming a rectangular shape. Pennants have converging trendlines forming a small triangle. Both are bullish continuation patterns with similar trading implications.

The flag typically lasts 1-4 weeks on daily charts. It should be proportionally shorter than the flagpole. Flags that last too long may evolve into a different pattern or indicate weakening momentum.

Look for: 1) Strong flagpole move with high volume, 2) Tight flag consolidation with declining volume, 3) Flag retraces less than 50% of the pole, 4) Breakout on increasing volume. The overall trend should be bullish.

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Disclaimer: Charted provides technical analysis for educational purposes only. This is not financial advice. All trading involves risk. Always consult a licensed financial professional before making investment decisions.

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