Bear Flag Chart Pattern

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Definition of 'Bear Flag Chart Pattern'

A bear flag is a chart pattern represented a sharp move down on high volume which is then followed by a sideways movement that is gradually making higher highs and higher lows.

In the chart image below the vertical white line represents the flag pole and the two parallel white lines represent the bottom and top edges of the flag. (This is essentially an upside down flag.)

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Bear Flag

If the flag does not form a rectangle and instead forms a narrowing cone then this can be called a Bear Pennant.

Traders are looking for a break of the lower edge of the flag for a continuation of the trend and will expect the next down move to be the same length as the flagpole.

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