Flag and Pennant
Flags and pennants are short pauses after a sharp move — a small sloping rectangle (flag) or a small symmetrical triangle (pennant) — often treated as continuation patterns.
Flags and pennants are short pauses after a sharp move. The sharp move is the flagpole. A flag is a small sloping box; a pennant is a small triangle. Traders often read them as signs the move may continue, but they can fail.
- Category
- Price Action
- Reading time
- 3 min
- Also called
- Bull flag, Bear flag, Pennant pattern
- Updated
Flags and pennants in plain words
Flags and pennants are brief pauses in a strong move — short continuation patterns before the earlier trend picks up again.1
A flag forms when price drifts between two parallel lines, making a small rectangle that tilts against the prior move.2
A pennant is instead a small symmetrical triangle whose lines start apart and narrow as it develops.1
How to read a flag or pennant
Find the flagpole
Find the flagpole — a sharp move driven by strong buying or selling.2
Check volume
Check that volume was heavy while the pole formed.1
Identify the shape
Look for a small rectangle sloping against the trend (a flag).1
Watch the time
Keep an eye on time: after about 12 weeks, a flag counts as a rectangle instead.1
Wait for the break
Act only after price breaks out of the flag or pennant.
Estimate a target
Estimate the target by adding the pole's length to the breakout point.1
Worked examples
Example 1 — Bull flag target
Target 48A hypothetical pole runs from 30 to 40; the flag breaks out at 38.
| Pole | 40 − 30 = 10 |
| Target | 38 + 10 = 48 |
Projecting the pole's length from the breakout gave the price target.1
Example 2 — Failed flag
FailedA hypothetical bull flag breaks down to 35 instead of up.
| Entry plan | 38 |
| Price | 35 |
The pattern failed and price broke the other way — flags and pennants are not guaranteed.2
Example 3 — Too old
RectangleA hypothetical flag has lasted 14 weeks.
| Age | 14 weeks |
After more than 12 weeks, this is better read as a rectangle than a flag.1
Flag vs pennant
| Aspect | Flag | Pennant |
|---|---|---|
| Shape | Parallel lines | Converging lines |
| Slope | Against the trend | Roughly flat |
| Needs pole | Yes | Yes |
| Read as | Continuation | Continuation |
Where traders use them
Trend trading
Joining a Trend after a pause.
Breakouts
Planning a Breakout entry.
Targets
Setting a Take Profit from the pole.
Stops
Placing a Stop Loss beyond the pattern.
Advantages and disadvantages
Advantages
- Short patterns with clear levels.
- Simple measured target.
- Fit trend-following plans.
Disadvantages
- They can fail.
- Shapes are subjective.
- Targets are only estimates.
- Need a clear prior move.
Going deeper
Read as far as you need. Each level builds on the one before it.
Structure
Beginner
Both are short pauses that usually resolve in the direction of the move before them.1
Flag vs pennant
Intermediate
The difference is shape: a flag is a small rectangle tilted against the trend, while a pennant is a small, narrowing triangle.1
Reliability
Advanced
Heavy volume on the pole helps, but these patterns can still break the wrong way or fail right after a breakout.2
Common mistakes
No flagpole
Without a sharp move, it is not a flag.
Entering early
Wait for the break.
Ignoring volume
Check the pole's volume.
Treating targets as certain
They are estimates.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Both start with a sharp move, the flagpole.
- A flag has parallel lines; a pennant converges.
- They are short-term continuation patterns.
- The pole length gives a rough target.
- They can fail.
Frequently asked questions
Is a bull flag bullish?
How long do flags last?
Can flags appear in crypto?
Further learning
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- StockCharts ChartSchool. Flag, Pennant (opens in a new tab) Checked .
- CMC Markets. Flags and pennants in trading explained (opens in a new tab) Checked .
Read more elsewhere
- Trading Metrics (our sister site): Flags and Pennants (opens in a new tab)
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. Trading Metrics is our sister site, under the same ownership; we are not affiliated with any other publisher linked above. Last reviewed . Report an error or request a source credit.