Bear Flag Pattern
Original schematic showing the guide's principal visual relationships.
Strong downward flagpole → shallow rebound flag → break below flag support.
Pattern anatomy
A sharp decline followed by a controlled upward or sideways channel before a possible continuation lower.
Strong downward flagpole → shallow rebound flag → break below flag support.
How it works
Identify the prior trend first, mark repeated swing highs and lows, then draw only the support, resistance, or neckline justified by those pivots. A pattern remains provisional until price closes beyond its confirmation boundary; visual resemblance alone is not enough.
How to read it
The rebound should be orderly and recover only part of the decline. A support break can reactivate the original downward impulse.
Practical example
A forceful decline forms the flagpole, then price rebounds in a narrow upward or sideways channel. A close below flag support confirms renewed selling; a recovery through the flagpole origin means the pause behaved more like a reversal.
Confirmation checklist
Confirm a clear impulse before the consolidation, controlled price compression during formation, and a close beyond the continuation boundary. Volume often contracts during the pause and expands on breakout.
Limitations and false signals
A strong recovery with expanding volume may be a reversal, not a flag. The pattern fails when price reclaims the flagpole origin.
Limitations and false signals
Frequently asked questions
What does this pattern or indicator describe?
A sharp decline followed by a controlled upward or sideways channel before a possible continuation lower.
How should the signal be confirmed?
The rebound should be orderly and recover only part of the decline. A support break can reactivate the original downward impulse. Confirm a clear impulse before the consolidation, controlled price compression during formation, and a close beyond the continuation boundary. Volume often contracts during the pause and expands on breakout.
What can cause a false signal?
A strong recovery with expanding volume may be a reversal, not a flag. The pattern fails when price reclaims the flagpole origin.