As of 12/20/2024   Indus: 42,840 +498.02 +1.2%     Trans: 15,892 +32.54 +0.2%     Utils: 986 +14.76 +1.5%     Nasdaq: 19,573 +199.83 +1.0%     S&P 500: 5,931 +63.77 +1.1%	YTD  +13.7%   0.0%    +11.9%    +30.4%    +24.3%	Targets    Overview: 12/12/2024     44,200 or 41,750 by 01/01/2025   16,100 or 17,700 by 01/01/2025   1,050 or 975 by 01/01/2025   20,500 or 19,300 by 01/01/2025   6,100 or 5,775 by 01/01/2025
Chart Pattern Indicator: on 12/5/24

As of 12/20/2024   Indus: 42,840 +498.02 +1.2%     Trans: 15,892 +32.54 +0.2%     Utils: 986 +14.76 +1.5%     Nasdaq: 19,573 +199.83 +1.0%     S&P 500: 5,931 +63.77 +1.1%	YTD  +13.7%   0.0%    +11.9%    +30.4%    +24.3%
Targets    Overview: 12/12/2024     44,200 or 41,750 by 01/01/2025   16,100 or 17,700 by 01/01/2025   1,050 or 975 by 01/01/2025   20,500 or 19,300 by 01/01/2025   6,100 or 5,775 by 01/01/2025
Chart Pattern Indicator: on 12/5/24

Bulkowski on Flags

Statistics updated on 8/27/2020.

I automated cataloging of flags to make identification of the trend start and end repeatable, and used linear regression of the average of the high and low price within the flag to determine flag tilt (then reviewed trend start, end, tilt, and changed them as necessary).

For more information on this pattern, read Encyclopedia of Chart Patterns Second Edition, pictured on the right, pages 335 to 349.

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

$ $ $

Flags appear as small rectangles usually tilted against the prevailing price trend and mounted at the end of a flagpole. If you don't have a straight-line (or a quick move) price run (the flagpole), then you don't have a flag. The best performing flags have a long, near vertical flagpole.

Flags: Important Bull Market Results*

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

* Performance results for flags are based on the short-term price swing, not the change from the breakout to the ultimate high or low as in most other chart patterns. That's why I don't show a rank and that's why the average rise/decline is so small.

Flags: Identification Guidelines

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Flags: Trading Tips

Trading Tactic	Explanation	The Measure Rule Half Staff Flag Tilt Tight v. Loose
Measure rule	There are 4 combinations of the measure rule computation. I show two on the right. The other two targets are just the start of the inbound trend (A). Compute the height from the start of the price swing (point A in the measure rule figure to the right) to the end of the price swing (B) and then multiply it by the above “percentage meeting price target.” Add it (upward breakouts) to the bottom of the flag (C) or subtract it (downward breakouts) from the top of the flag (C) to get the target (D).
Half staff	Sometimes, the flag will appear midway in the price trend. The half staff figure to the right shows an example, (move A equals B).
Flag tilt	The best performance comes when the inbound trend is upward leading to a flag which tilts downward. An example of that is the Half Staff picture on the right.
Flat base	If the flag appears above (upward breakouts) or below (downward breakouts) a flat base then expect the move to be a large one.
Tight flags	A tight flag performs better than a loose one. A loose flag is one in which price meanders, pokes outside the trendline boundary, contains white space, or looks jagged. The tight v. loose figure to the right shows an example.
Yearly low	The best performers occur when the breakout is within a third of the yearly low.

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Flags: Example

The above figure shows an example of a flag chart pattern. The price swing leading to the flag begins at A and ends at the top of the flagpole, B. A short flag sees price consolidate for a few days before breaking out upward and trending higher.

-- Thomas Bulkowski

See Also

• Pennants look similar to flags. Find out why.
• Is your flag really a rectangle?
• For good times, take the flag slider quiz!
• Explore high and tight flags, a special kind of flag.
• Flags and high and tight flags. What's the difference?
• A closer look at high and tight flags.
• V-bottom, extended
• Extended V-top

Computers make very fast, very accurate mistakes.