A worked example that explains the rule, not a stock price. The circle marks the first close beyond the level. Orange marks invalidation. Prices are in the right-hand column, and sessions sit under the volume bar.Hollow green candles closed above their open, and filled red ones below it.
Numbers in the example chart
From the same calculation that draws the shape and writes the "Measuring the target" section below.
Trigger level
$38.8 · at the close of session 60
Invalidation
33.6$
Chart span
70 sessions
What it is
Price doubles or more in four to eight weeks, then a tight pullback of no more than a quarter of the peak, then a breakout above it.
William O'Neil (William O'Neil) considers it one of the strongest and rarest continuation patterns, because the demand that doubled the price left no room for a deep pullback. A rise this fast usually reflects a repricing of the company itself after results or major news, not a general improvement in the market.
A close below the flag's low, or a pullback of more than 25% from the peak.
Reading it stage by stage
PolePrice doubles in a few weeks on high volume · demand here outweighs all supply.
FlagA tight, quiet pullback between 10% and 25% from the peak, and volume dries up.
BreakoutA close above the flag's high on high volume · after it, the position is managed with a stop that rises under each new low.
ManagementAfter the breakout, the trailing stop rises under each higher low. The exit isn't set in advance; it is set by price leaving its rhythm.
Recognition rules
A rise of 100% or more within 4 to 8 weeks, about 20 to 40 sessions.
A pullback between 10% and 25% from the peak lasting 3 to 5 weeks.
The flag is tight and quiet, and volume dries up inside it.
Price stays in the flag near the peak, since a tight sideways pullback is stronger than a steep sloping one.
Read it on the daily or weekly timeframe, since short timeframes make look-alike shapes that don't carry its meaning.
Confirmation is a close above the flag's high on high volume.
Measuring the target
There is no reliable measure of a target after a rise this size, so the usual approach is to manage the position with a Trailing Stop (Trailing Stop) under the flag's lows. In the example, price rose from $19.3 to $38.8 (+101% in 36 sessions), and the flag low is at $33.6 (−13% from the peak).
Where it fools you
A pullback deeper than 25% or longer than five weeks takes it out of the definition, and volatility after a rise this size hits a close stop before the breakout.
Its rarity makes the label tempting for every sharp rise: without a real doubling within a few weeks, it is an ordinary bull flag by its own reading.
Whoever buys inside the flag before the breakout is betting on a continuation that hasn't been proven: the flag may stretch for more weeks, or deepen and fall out of the definition.
Open the daily timeframe for any symbol and draw the pattern yourself. Your drawing is saved per symbol in your browser, and the terminal does not name or detect the pattern.
╱ TrendlineFlag
⇕ MeasureTarget equals pattern height
We do not detect chart patterns with a numeric rule: telling them apart takes judgment on the chart. Candlestick patterns with a numeric rule are detected daily by the candlestick pattern scanner.
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