Technical Analysis

Bear Flag

The bearish mirror of the bull flag — a sharp drop followed by a brief upward consolidation before the downtrend continues.

Key rules

  1. Flagpole must be a sharp, impulsive decline
  2. Consolidation retraces no more than 50% of the flagpole
  3. Volume contracts during the flag and expands on breakdown
  4. Measured target = breakdown point − flagpole height
  5. Pattern fails if price closes above the flag's upper trendline

A bear flag forms after a sharp, steep decline (the flagpole) and a brief consolidation where price moves slightly higher in a parallel channel — the flag. It is a continuation pattern signalling that sellers remain in control and a further breakdown is likely.

**Flagpole** The flagpole is a strong, fast decline driven by high volume. This represents committed selling pressure.

**Flag Channel** The consolidation drifts upward in a tight, parallel channel. Volume should dry up during this phase. A retracement of more than 50% of the flagpole weakens the pattern significantly.

**Breakdown** Entry is triggered when price closes below the lower boundary of the flag. Volume should expand on the breakdown. The measured target is the flagpole height subtracted from the breakdown level.

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