Bullish Flag Chart Pattern

The bullish flag of course is a pattern that is bullish, and features two components: the pull in the flag itself. This is formed once we have an impulsive move higher, and then a pullback in a downtrend in channel. This is when the market is resting, but once we break out to the upside we eventually continue much higher.

By the time this pattern forms, the market is well within an uptrend, and as a result the consolidation that the flag represents is simply a continuation pattern waiting to happen. The flag itself needs to be no longer than one third of the length of the pole, and as a result the pullback is slight, and allows for more buyers to get involved. Looking at the graphic below, you can see a bullish flag:

Bullish Flag formation.

Bullish Flag formation.

Looking at the chart underneath, you can see that we had formed a bullish flag, and then continue to go much higher. This was the beginning of an even longer-term move, and as a result the buyers became more and more aggressive. Keep in mind that when you form a flag, the first target will be equal to the length of the pole once you break out of the flag itself. As you can see on the graphic below, the market had no issues doing that at all.

Bullish Flag in action.

Bullish Flag in action.

 

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