A Bear Flag is a bearish continuation pattern that generally occurs after a decline in price. After a period of price consolidation in the flag, prices generally continue in the direction of the prior trend.
A Bear Flag can be identified a long red candlestick that resembles a flagpole, and a flag which resembles a rectangle marked by two parallel lines that slope against the prevailing trend.
Measuring the move: Add the vertical distance (A) of the flagpole to the breakout (B) and this would give you an approximate price target for the next run up in price.
Trading the pattern: Traders should be watching the lower trend line of the pattern. A bearish entry signal is when price pierces through the upper trend line.
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