Chart School / Recognizing Patterns
Bear flags
Lesson 10 of 14 · about 1 min read, plus practice · Glossary
A bear flag describes a possible continuation after a sharp decline, sometimes called the pole. A brief sideways or upward consolidation follows. A later downside break is proposed confirmation of continuation, not a certainty. Without the prior decline, an upward channel is not enough to label a bear flag. Flag boundaries, duration and the meaning of a decisive break involve judgment. Volume may add context, but price and volume together still cannot promise an outcome.
Worked fictional example
Fictional River falls from $60 to $40, pauses upward through $42–$45, then closes at $38. The earlier decline supplies context; the last close supports the continuation reading under a predefined lower-boundary rule.
On a small screen, scroll the chart horizontally to read every label.
Observation order / daily periods →
Accessible data table and chart description
Separate fictional daily OHLCV illustration for Bear flags. Hollow body: close at or above open; filled body: close below open. Table provides exact values.
| Date UTC | Open | High | Low | Close | Volume |
|---|---|---|---|---|---|
| 2024-01-01 | 60 | 61 | 59 | 60 | 100 |
| 2024-01-02 | 60 | 61 | 49 | 50 | 120 |
| 2024-01-03 | 50 | 51 | 39 | 40 | 0 |
| 2024-01-04 | 40 | 43 | 39 | 42 | 160 |
| 2024-01-05 | 42 | 46 | 41 | 45 | 180 |
| 2024-01-06 | 45 | 46 | 42 | 43 | 200 |
| 2024-01-07 | 43 | 44 | 37 | 38 | 220 |
Legend: hollow body = close ≥ open; filled blue body = close < open. Wick = low to high. Direction is also readable from the table, without color.
What could invalidate this interpretation?
A sustained move above the consolidation, especially a substantial recovery of the prior decline, weakens the bear-flag interpretation.
A counterexample
A gentle upward range with no sharp preceding decline is not a textbook bear flag. A recovery can also turn a proposed flag into a failed setup.
Check your understanding
Further learning
Original FinanceFD explanations and drawings. For additional context, see Fidelity’s overview of technical analysis, Fidelity’s RSI guide and Investor.gov’s investing introduction.
Learning progress
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