Flag Pennant

Flag & Pennant Patterns

Continuation patterns that form during pauses in strong trends.

Pattern Structure

Components: Flagpole (strong impulsive move) → Flag/Pennant (consolidation) → Breakout (continuation).

• Bull Flag — Strong upward pole, downward-sloping rectangular channel, breaks upward
• Bear Flag — Strong downward pole, upward-sloping rectangular channel, breaks downward
• Pennant — Strong move (pole), symmetrical triangle consolidation, breaks in pole direction

| Criteria | Flag | Pennant | |----------|------|---------| | Shape | Rectangular channel (2 parallel lines) | Symmetrical triangle (2 converging lines) | | Slope | Against trend | Neutral | | Volume | Decreasing | Decreasing |

Workflow

1. Get Swing Point Data

Identify the flagpole and consolidation boundaries:

get_candles_around_date(symbol=, exchange=, interval=, date=)

2. Draw Flag/Pennant Boundaries (2 parallel calls)

For flags (2 parallel trend lines sloping against the pole):

# Upper flag boundary
draw_chart_analysis(action="create", drawing={
    "type": "trend",
    "points": [
        {"time": , "price": },
        {"time": , "price": }
    ],
    "options": {"text": "Flag R"}
})

# Lower flag boundary (parallel to upper)
draw_chart_analysis(action="create", drawing={
    "type": "trend",
    "points": [
        {"time": , "price": },
        {"time": , "price": }
    ],
    "options": {"text": "Flag S"}
})

For pennants: same approach but lines converge (like a small symmetrical triangle).

3. Confirm and Enter

Confirm declining volume during consolidation via get_indicators(indicator_code="mfi", symbol=, exchange=, interval=).

Standard: Enter on break of flag/pennant boundary with volume spike. Stop beyond opposite side. Conservative: Wait for breakout + retest of boundary. Enter on bounce. Target: Flagpole length projected from breakout point.

Key Rules

• Pole must be strong and impulsive (3+ candles of directional momentum)
• NEVER trade a flag that retraces more than 50% of the pole — this invalidates the pattern
• NEVER enter without volume decline during formation + spike on breakout
• Quick formations are more reliable than extended consolidations
• Flag duration should be short relative to the pole

Related Skills

• triangle-patterns — Pennants are small symmetrical triangles
• channel-trading — Flags are short-duration trending channels

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: SKE-Labs
• Source: SKE-Labs/agent-trading-skills
• License: Apache-2.0

Install and usage instructions live in the source repository linked above.