These tech stocks have seen bullish 'flag patterns' recently, says Katie Stockton

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. …