A flag pattern is one of the most powerful as well as reliable chart pattern which one can identify easily. We can found flags in both the trends, uptrend & downtrend, however in downtrend we may call it inverted flag too. Sometimes flags looks like ABCD harmonic pattern, but, the difference is that in flag initial trend stagnated and price remains in a small range and than gives breakout in same direction, while in ABCD, after move A to B, during move B to C trend retraces upto a certain fibonacci retracement level. Here are some examples of Flag and inverted flag pattern :
DLF : stock closed at 270 on Jan 11, 2018 while call was given on 20-11-2017 when stock was at 227
Bharti : Short call was shared when stock was at 530, however it was due to an another formation called "Rounding top" on bigger timeframe
Inverted Flag -target done
How to calculate target ?
Flag formation is a continuation pattern means the stock/indices is already moving in that direction and than it stops and forms a small trading range (mostly rectangle) and than gives breakout for final target, in entire pattern length of earlier move(pole) and final move remains same, so you can calculate target easily : look at the chart below :
Practice video
