These tech stocks have seen bullish 'flag patterns' recently, says Katie Stockton
HS 25/05/2026
As we honor those who served in the military this Memorial Day, it seems appropriate to focus on the bullish flag pattern. Flag patterns are a byproduct of positive momentum and tend to appear in environments characterized by steep upmoves like the current one. A flag pattern is essentially a sideways consolidation phase following a sharp rally, as shown on the chart of privacy coin Zcash. The first close outside of the consolidation phase is the trigger to take a position. On daily charts, flag breakouts have bullish short-term implications that can persist for days or weeks. Flag breakouts tend to foster additional upside momentum, often resulting in an advance that mirrors the “flagpole.” Ideally, the breakouts are supported by above-average volume. The April-May breakout by Zcash shows why it is important to act quickly when taking a position. We have found that some stocks are especially prone to flag patterns, often in the technology sector. Dell Technologies , for one, has seen a series of flag breakouts as it has trended higher. Its consolidation phases have repeatedly refreshed the uptrend, suggesting that traders should welcome periods of digestion after steep rallies. It is easiest to find examples of flag patterns among semiconductor stocks, which have been a primary source of upside leadership. The latest flag breakout by Arm Holdings is a good example of how explosive the resulting rallies can be, having achieved a measured move in just three days. A measured move projection is derived from the “flagpole”, projected higher from the low point of the consolidation pattern. A search for new flag breakouts in the semiconductor sector brings us to Lam Research , which emerged from a digestion phase late last week. If it is indeed a flag pattern, LRCX should advance in the very near-term in a manner similar to the April 29-May 6 rally, which resulted in a steep 23% gain. Flags are continuation patterns that tend to have the best outcomes within strong uptrends. Of course, top-down influences contribute to their success rate. While the current environment has been conducive to flag patterns, that could change quickly, so we would pay attention if flag breakouts stop working. —Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer. Fairlead Strategies Disclaimer: This communication has been prepared by Fairlead Strategies LLC (“Fairlead Strategies”) for informational purposes only. This material is for illustration and discussion purposes and not intended to be, nor construed as, financial, legal, tax or investment advice. You should consult appropriate advisors concerning such matters. This material presents information through the date indicated, reflecting the author’s current expectations, and is subject to revision by the author, though the author is under no obligation to do so. This material may contain commentary on broad-based indices, market conditions, different types of securities, and cryptocurrencies, using the discipline of technical analysis, which evaluates the demand and supply based on market pricing. The views expressed herein are solely those of the author. This material should not be construed as a recommendation, or advice or an offer or solicitation with respect to the purchase or sale of any investment. The information is not intended to provide a basis on which you could make an investment decision on any particular security or its issuer. This document is intended for CNBC Pro subscribers only and is not for distribution to the general public. Certain information has been provided by and/or is based on third party sources and, although such information is believed to be reliable, no representation is made with respect to the accuracy, completeness, or timeliness of such information. This information may be subject to change without notice. Fairlead Strategies undertakes no obligation to maintain or update this material based on subsequent information and events or to provide you with any additional or supplemental information or any update to or correction of the information contained herein. Fairlead Strategies, its officers, employees, affiliates and partners shall not be liable to any person in any way whatsoever for any losses, costs, or claims for your reliance on this material. Nothing herein is, or shall be relied on as, a promise or representation as to future performance. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Opinions expressed in this material may differ or be contrary to opinions expressed, or actions taken, by Fairlead Strategies or its affiliates, or their respective officers, directors, or employees. In addition, any opinions and assumptions expressed herein are made as of the date of this communication and are subject to change and/or withdrawal without notice. Fairlead Strategies or its affiliates may have positions in financial instruments mentioned, may have acquired such positions at prices no longer available, and may have interests different from or adverse to your interests or inconsistent with the advice herein. Any investments made are made under the same terms as nonaffiliated investors and do not constitute a controlling interest. No liability is accepted by Fairlead Strategies, its officers, employees, affiliates, or partners for any losses that may arise from any use of the information contained herein. Any financial instruments mentioned herein are speculative in nature and may involve risk to principal and interest. Any prices or levels shown are either historical or purely indicative. This material does not take into account the particular investment objectives or financial circumstances, objectives or needs of any specific investor, and are not intended as recommendations of particular securities, investment products, or other financial products or strategies to particular clients. Securities, investment products, other financial products or strategies discussed herein may not be suitable for all investors. The recipient of this information must make its own independent decisions regarding any securities, investment products or other financial products mentioned herein. The material should not be provided to any person in a jurisdiction where its provision or use would be contrary to local laws, rules, or regulations. This material is not to be reproduced or redistributed absent the written consent of Fairlead Strategies.
