There are two parts to the American flag: a blue background containing white stars, which is called the "union," and alternating red and white stripes. Guidelines on displaying the American flag are outlined by the U.S. Flag Code. The U.S. Flag Code is contained under Title 4 of the United States Code and can be modified by any acting American president.
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According to the U.S. Flag Code, the proper way to hang a U.S. flag from a wall is to always keep the union on the observer's left. For example, when the flag is displayed horizontally, the stars will be in the uppermost left corner. When the flag is displayed vertically, the stars will remain in the uppermost left corner. The stripes on the American flag are always displayed to the right of and below the stars.
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To determine the proper way to hang a U.S. flag from the ceiling, decide where viewers will be when they first see the flag. Hang the flag by positioning the union to the upper left as most viewers will first encounter it. For example, if the American flag is being displayed in your home, and most people enter through the front door, the union should be in the top left corner of the flag as visible from the front door.
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According to the U.S. Flag code, you should not display American flags outdoors during inclement weather. You may display the flag outdoors during the night, but you should illuminate it. The proper way to hang a U.S. flag from a wall or ceiling includes not allowing it to wrinkle or fold.