•The Bull Flag is a bullish continuation pattern that is characterized by a large and relatively quick upside move followed by profit taking as represented by a tight sideways to slightly bearish consolidation on decreasing volume.

•A Bull Pennant is very similar to a Bull Flag; the difference is that the consolidation is in the form of a small symmetrical triangle.  The upside breakout point is just above the upper trend line of the triangle.

•The resumption of the upside move occurs when the stock trades above the high of the flag on increasing volume.

•The consolidation is nothing more than profit taking and should be expected after a fairly large, rapid gain in the stock.

•The stock rises quickly with volume and smart traders begin to take some off the table which causes the pause.  This is normal and expected. 

•In my opinion, the Bull Flag is one of the most consistently bullish entries in trading.

•Once the stock breaks the high of the flag your target should be the length of the initial move in the trade (The Pole) added to the top of the breakout point.

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