From Traderpedia

Definition: A chart pattern resembling a parallelogram that slopes against the prevailing trend.

Both a consolidation and continuation pattern, the Flag is related to the Pennant both of which are periods where the stock or index 'rests' or pauses before resuming its prior trend. In other words it pulls back or consolidates before breaking out and resuming the prior trend.

The above image shows the flag as part of an uptrend, but it appears in a downtrend just the same however the pattern is flipped upside down and the point to 'buy' would become the point to 'sell'.