As of 05/24/2024
  Indus: 39,070 +4.33 +0.0%  
  Trans: 15,083 +74.08 +0.5%  
  Utils: 926 +1.92 +0.2%  
  Nasdaq: 16,921 +184.76 +1.1%  
  S&P 500: 5,305 +36.88 +0.7%  
YTD
 +3.7%  
-5.1%  
 +5.0%  
 +12.7%  
 +11.2%  
  Targets    Overview: 05/13/2024  
  Up arrow41,000 or 38,500 by 06/01/2024
  Up arrow16,050 or 15,300 by 06/01/2024
  Up arrow960 or 900 by 06/01/2024
  Up arrow17,250 or 15,850 by 06/01/2024
  Up arrow5,500 or 5,100 by 06/01/2024
As of 05/24/2024
  Indus: 39,070 +4.33 +0.0%  
  Trans: 15,083 +74.08 +0.5%  
  Utils: 926 +1.92 +0.2%  
  Nasdaq: 16,921 +184.76 +1.1%  
  S&P 500: 5,305 +36.88 +0.7%  
YTD
 +3.7%  
-5.1%  
 +5.0%  
 +12.7%  
 +11.2%  
  Targets    Overview: 05/13/2024  
  Up arrow41,000 or 38,500 by 06/01/2024
  Up arrow16,050 or 15,300 by 06/01/2024
  Up arrow960 or 900 by 06/01/2024
  Up arrow17,250 or 15,850 by 06/01/2024
  Up arrow5,500 or 5,100 by 06/01/2024

Bulkowski on High and Tight Flags

Statistics updated on 8/26/2020.

For more information on this pattern, read Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right, pages 350 to 361.

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

$ $ $

A high and tight flag
High and Tight Flag

 

High and Tight Flag: Important Bull Market Results

Overall performance rank (1 is best): 30 out of 39
Break even failure rate: 15%
Average rise: 39%
Throwback rate: 67%
Percentage meeting price target: *82%

* Uses a half-height target.

The above numbers are based on 1,028 of perfect trades. See the glossary for definitions.

High and Tight Flag: Identification Guidelines

CharacteristicDiscussion
Price trendUpward leading to the flag. Price must rise at least 90% (shoot for a double) in 2 months or less.
ShapeA consolidation pattern forms after price doubles. It usually doesn't look like a flag or pennant, just a pause in the price rise.
VolumeRecedes for best performance
ConfirmationThe pattern confirms as valid when price closes above the highest peak in the pattern, which is usually the flagpole top.

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High and Tight Flag: Trading Tips

Trading TacticExplanation High and tight flag chart pattern measure rule
The Measure Rule

Tight versus loose flag

Tight v. Loose

Measure ruleCompute 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 take half of it. Add it to the bottom of the flag (C) to get the target (D).
BreakoutOnly buy when price closes above the highest peak in the chart pattern (including the flagpole). That is point B in the Measure Rule figure to the right. Buying sooner risks price never confirming the pattern (in other words, price drops or moves horizontally for months). I know this is different than what I wrote in my book. New research says high and tight flags fail too often when using a flag trendline break. Instead, place a buy stop above the highest high in the chart pattern.
Tight patternsTrade tight flags, not loose ones. Tight flags perform better than loose ones. A loose flag is one in which price meanders, pokes outside the trendline boundary, contains white space, or looks jagged. See the figure to the right.
SlopePrice trends of 45 degrees or so in the flagpole mean a better post breakout rise than ones that go nearly vertical leading to the flag.
TrendlineFlags with a down-sloping top trendline tend to outperform.
Trendline TradeFor steep price trends, use a volatility stop and draw a trendline beneath price. If price closes below the trendline, then consider selling. For an example, look at IIIN from January to April 2006. The high and tight flag starts in January and price more than doubles in less than 2 months, eventually rounding over at the top.

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High and Tight Flag: Example

High and tight flag chart pattern example

The above figure shows an example of a high and tight flag chart pattern. Price begins the rise in October at 9.36 and rises to 17.80, a climb of 90% in less than 2 months. Then price moves sideways, forming an ascending triangle. When the breakout occurs, it confirms the high and tight flag chart pattern as a valid one and price resumes the up trend. Price tops out at 23.72 less than 2 months later, a rise of 33%.

-- Thomas Bulkowski

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High and Tight Flag: Other Examples

See Also

 

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