Bull flag


Bullish flag formations are found in stocks with strong uptrends and are considered good continuation patterns. They are called bull flags because the pattern resembles a flag on a pole. The pole is the result of a vertical rise in a stock and the flag results from a period of consolidation.

The shape of the flag is not as important as the underlying psychology behind the pattern.

Bull Flags can be stronger when the swing high that begins the pattern is also an all time high due to the possible lack of future overhead resistance.

Tip for trade: consolidation should be on lower volume, while breakout of the patter should be at stronger volume.