A bearish continuation chart pattern consisting of a sharp downward price move (the flagpole) followed by a brief period of upward or sideways consolidation contained within parallel or slightly converging trendlines (the flag). The pattern signals that the preceding selling pressure is likely to resume, and a breakdown below the lower boundary of the flag confirms the continuation. Technical analysts often measure the expected move by projecting the length of the flagpole downward from the breakout point.
Example
“After dropping $15 in two sessions, the stock formed a bear flag with a slight upward drift over five days before breaking down and falling another $12.”