Bear Flag
Well-DocumentedA short bearish continuation pattern consisting of a sharp, near-vertical decline (the "flagpole") followed by a brief, gently upward-sloping consolidation (the "flag") before the decline resumes.
Candlestick chart showing a sharp, steep decline (the flagpole), followed by a brief, gently upward-sloping sideways consolidation (the flag), then a breakdown below the flag that resumes the decline.
Sample data — illustrative only, generated to demonstrate this pattern's shape. Not a real security.
Identification Criteria
- A strong, fast, high-volume sell-off forms the flagpole.
- The flag itself is a tight, short-duration consolidation that drifts sideways to slightly up, forming a small parallel channel.
- Volume characteristically dries up during the flag, then expands again on the breakdown.
- The flag is brief relative to the flagpole — a consolidation lasting as long as the pole itself is more likely a different pattern altogether.
Formation Logic
The flagpole reflects a burst of intense selling. The flag represents a brief, low-conviction bounce — short covering or bargain-hunting absorbed calmly by the market — before the underlying selling pressure that drove the pole reasserts itself.
Breakout / Confirmation Rule
Confirmation requires a decisive close below the lower boundary of the flag's consolidation channel, ideally on a pickup in volume. A flag that rallies too steeply, or for too long, starts to resemble a genuine reversal rather than a pause.
Measured-Move Price Target
A commonly used, purely illustrative technique: measure the length of the flagpole (from its start to its low), then project that same distance below the breakdown point.
Common Pitfalls
- A flag that retraces more than roughly half the flagpole is a warning sign that the move may already be reversing rather than merely pausing.
- Flags that drag on far longer than the flagpole took to form lose their continuation character.
- Low-volume breakdowns from the flag channel are prone to failure.