Flag after a fall
A sharp fall followed by a short, slightly upward drift inside two parallel lines, like a flag on a pole.
What it shows
A flag has two parts. The pole is a fast, steep move down. The flag is a short pause where price drifts up against the pole inside a small parallel channel.
The pattern is complete when price closes below the lower line of the flag. Until then it is just a pause.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Find a pole: a fall of at least 15% in 20 bars or fewer.
- Find a flag after it: 5 to 20 bars where price stays inside a channel sloping up by less than half of the pole.
- Draw two parallel lines through the highs and lows of the flag.
- Mark complete when a close falls below the lower line.
Starting values: Pole size 15% in 20 bars; Flag length 5 to 20 bars; Flag depth under 50% of the pole. These are proposed and will be tuned on real price data before launch.
How to read it
- The steep part is the pole.
- The two parallel lines are the flag.
- The gold dot is the first close below the flag.
Status labels you may see
| Label | What it means |
|---|---|
| Flag forming | Price is inside the flag lines. |
| Broken down | Closed below the lower line. |
| Broken up | Closed above the upper line. |
What cancels it
A close above the flag's upper line, or a retrace of more than half of the pole.
What traders check next
- Volume inside the flag and at the break.
- The length of the flag compared with the pole.
- Whether the break closes below or only wicks.
Limits
- Many pauses look like flags.
- The size rules are our own choices.
- A break can fail.
Try it in forecastviz
- Open any ticker and choose Continuation patterns → Flag after a fall in the left menu.
- Switch between 3M, 6M, 1Y to see how the picture changes.
- Compare with Flag after a rise and Pennant after a fall on the same chart.
Questions
Why is it called a bear flag?
It is the common name for a flag after a fall. It is a naming convention, not a forecast.
Is it the mirror image of the other flag?
Yes.
Related trends
Further reading
- Edwards and Magee, Technical Analysis of Stock Trends
- Bulkowski, Encyclopedia of Chart Patterns
- O'Neil, How to Make Money in Stocks
Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.