A Flag Up is a continuation pattern that can form after a sudden, sharp rise in the stock price accompanied by high volume. A series of profit taking can result in the formation of a tight parallelogram that slants agains the prevailing trend. The volume decreases during the formation of this zone and must rise on the breakout to complete the pattern.
Profit Target - can be measured by adding the height of the flagpole to the point of breakout.
Example - A daily chart of RMTR showing flags in a rising trend.
Trading Tip - best traded when tightly built. Flags that form just after a significant trading range breakout can signal the start of major moves or trends.