Technical Analysis
Bull Flag
A continuation pattern that forms after a sharp impulsive move up, followed by a brief consolidation channel sloping downward before the next leg higher.
Key rules
- Flagpole must be a sharp, impulsive move — not a gradual rise
- Consolidation retraces no more than 50% of the flagpole
- Volume contracts during the flag and expands on breakout
- Measured target = breakout point + flagpole height
- Pattern fails if price closes below the flag's lower trendline
A bull flag is one of the most reliable continuation patterns in technical analysis. It appears after a strong, rapid upward move (the "flagpole") and is followed by a short consolidation phase where price drifts lower in a tight, parallel channel — the "flag."
The pattern signals that buyers are simply catching their breath before driving price higher again. The consolidation should be orderly with declining volume, and the breakout above the flag's upper trendline on expanding volume confirms the continuation.
**Flagpole** The flagpole is the initial sharp rally. It should be steep and driven by high volume, representing strong institutional buying or a catalyst.
**Flag Channel** The consolidation should retrace no more than 50% of the flagpole. A deeper retracement weakens the pattern. The channel slopes downward (bearish drift) and volume should contract during this phase.
**Breakout** Entry is taken when price closes above the upper boundary of the flag, ideally accompanied by a surge in volume. The measured move target is calculated by adding the flagpole height to the breakout point.