Definition
Bear Flag forms after a strong downward move (flagpole) followed by a parallel upward-sloping consolidation (flag). It indicates a pause in a downtrend. Breakdown below the flag continues the decline with a target equal to the flagpole length.
Formula
Price Target = Breakdown Point - Flagpole Length
Example
Stock drops from $50 to $40 (flagpole=$10), then consolidates up to $43 in a flag pattern. Breakdown below $40 targets $33 ($43 - $10).
FAQ
What is Bear Flag?
A bearish continuation pattern with a sharp decline followed by an upward-sloping consolidation.
How do you calculate Bear Flag?
A common formula for Bear Flag is: Price Target = Breakdown Point - Flagpole Length
Why is Bear Flag important?
Bear Flag helps investors evaluate chart patterns and make more informed decisions.