As of 12/06/2019
  Indus: 28,015 +337.27 +1.2%  
  Trans: 10,709 +133.66 +1.3%  
  Utils: 855 -1.82 -0.2%  
  Nasdaq: 8,657 +86.13 +1.0%  
  S&P 500: 3,146 +28.48 +0.9%  
YTD
 +20.1%  
 +16.8%  
 +19.9%  
 +30.5%  
 +25.5%  
  Targets    Overview: 11/29/2019  
  Up arrow28,600 or 27,600 by 12/15/2019
  Up arrow11,300 or 10,500 by 12/15/2019
  Up arrow875 or 830 by 12/15/2019
  Up arrow8,900 or 8,400 by 12/15/2019
  Up arrow3,250 or 3,075 by 12/15/2019
As of 12/06/2019
  Indus: 28,015 +337.27 +1.2%  
  Trans: 10,709 +133.66 +1.3%  
  Utils: 855 -1.82 -0.2%  
  Nasdaq: 8,657 +86.13 +1.0%  
  S&P 500: 3,146 +28.48 +0.9%  
YTD
 +20.1%  
 +16.8%  
 +19.9%  
 +30.5%  
 +25.5%  
  Targets    Overview: 11/29/2019  
  Up arrow28,600 or 27,600 by 12/15/2019
  Up arrow11,300 or 10,500 by 12/15/2019
  Up arrow875 or 830 by 12/15/2019
  Up arrow8,900 or 8,400 by 12/15/2019
  Up arrow3,250 or 3,075 by 12/15/2019

Bulkowski's Flags

 

Statistics updated on 10/24/2018. Rank updated on 7/26/19. I automated my 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, and tilt and changed them as necessary).

For more information on this pattern, read Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., 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.

-- Tom Bulkowski

$ $ $

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.

Important Results
Identification Guidelines
Trading Tips
Example
See Also

 

Two flag chart patterns

Two Ideal Flag Patterns

Flags: Important Bull Market Results*

Overall performance rank for breakouts: 56 out of 56
Break even failure rate for up/down breakouts: Not applicable
Average rise/decline: 10%; 8%
Throwback/pullback rate: 53%; 60%
Percentage meeting price target for up/down breakouts: 45%; 45%

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

* The 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.

Flags: Identification Guidelines

CharacteristicDiscussion
Price trendCan be any direction leading to the chart pattern.
ShapeLooks like a small rectangle often tilted against the prevailing price trend.
Trend linesPrice moves between two parallel, or near parallel, trendlines.
3 weeksFlags are short, less than 3 weeks long. Patterns longer than that are rectangles or channels.
FlagpoleThe flagpole which leads to the flag should be unusually steep and last several days.
Volume trendDownward trend 74% (up breakouts) to 78% (down breakouts) of the time.
BreakoutUpward 60% of the time.

Top of page More

Flags: Trading Tips

Trading TacticExplanation Flag chart pattern measure rule
The Measure Rule
Flag half staff move
Half Staff
Flag tilt
Flag Tilt
Tight versus loose flag
Tight v. Loose
Measure ruleThere 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 staffSometimes, the flag will appear midway in the price trend. The half staff figure to the right shows an example, (move A equals B).
Flag tiltThe 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 baseIf the flag appears above (upward breakouts) or below (downward breakouts) a flat base then expect the move to be a large one.
Tight flagsA 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 lowThe best performers occur when the breakout is within a third of the yearly low.
Throwbacks and pullbacksThrowbacks and pullbacks hurt post breakout performance.

Top of page More

Flags: Example

Flag with flagpole chart pattern 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

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:      New                  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

Copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved.
Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.
Some pattern names are registered trademarks of their respective owners.

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