Bear Flag
A sharp decline (the pole), then a brief, mild bounce or sideways drift (the flag) — often just a pause before the drop continues.
The bearish mirror of a Bull Flag: a fast, sharp decline (the pole), followed by a short-lived bounce or sideways drift (the flag) that only recovers a small fraction of the drop. The read is that the bounce is short covering or bargain-hunting, not a real change in sentiment — the broader downtrend's momentum hasn't actually reversed.
Confirmation, for traders who use it, is a breakdown below the flag's own short-term low — a continuation of the original decline rather than a genuine recovery.
The mirrored setup: a break below the flag's own low is the commonly-watched continuation signal, with a stop above the flag's high defining where the trade would be proven wrong.
A bounce that recovers most of the pole's decline, or drags on much longer than the pole itself took, is generally read as a possible reversal forming rather than a genuine pause — the same overconfidence risk as with bull flags, just in the opposite direction.
- Same logic as a Bull Flag, inverted — a shallow bounce after a steep drop, not a deep one.
- A bounce that recovers most of the pole's decline stops being a flag and starts looking like an actual reversal.
- Like all continuation patterns, it only makes sense in the context of the trend already in place before it.