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Investment
Bear Flag
A chart pattern where price consolidates after a strong downward move, often followed by further decline.
Bear flags are the opposite of bull flags. They appear in downtrends and signal continuation. Traders use them to enter short positions or add to existing shorts with defined risk above the flag.
It's the flag waving while the bear catches its breath before continuing to push prices lower.
Real world: After a sharp drop in a tech stock, price moves sideways in a slightly upward-sloping channel (the flag). When it breaks downward, traders expect the downtrend to continue.
💡 Bear flags give short sellers confidence that the downtrend still has fuel left.