Bull Flag: Strength Taking a Breath

The shape

An explosive rally of 8%+ in days (the pole), then a narrow, drifting pause of up to two weeks that gives back less than half the move on shrinking volume (the flag). The signal is the break above the flag's high.

Why it works

After a strong burst, two things could happen: real selling (reversal) or mere profit-taking (rest). The flag's *character* tells you which — shallow, low-volume drift means holders aren't leaving, just catching breath. Demand that created the pole is usually still there.

Our scanner's rules

• Pole: at least +8% in fifteen sessions or fewer.
• Flag: retraces less than 50% of the pole, on lighter volume, without making new highs.
• Entry: the break above the flag. Stop: below the flag's low. Target: one pole-length above the breakout (the "measured move").

Common mistakes

• Confusing a flag with a top: a "flag" that gives back 70% of the pole on *rising* volume is distribution, not rest — our retrace and volume filters exist precisely to exclude these.
• Chasing the pole itself. The whole edge of this pattern is that it gives you a defined-risk second chance to join a move you missed.
• Oversizing because the stop looks tight: tight stops mean more shakeouts, so respect position sizing anyway.

Find today's flags on the Strategies page.