Find bear flag patterns with sharp declines followed by weak bounces. Breakdown setups graded A+ to B across 5,000+ stocks daily.
Run this scan →The bear flag is a bearish continuation pattern that mirrors the bull flag in reverse. It forms when a stock experiences a sharp, high-volume decline (the pole) followed by a brief, low-volume bounce or sideways consolidation (the flag). The pattern signals that sellers are merely pausing to regroup before the next wave of selling drives the stock to new lows.
The psychology of the bear flag reflects the behavior of trapped buyers and emboldened sellers. The pole decline creates fear and forced selling among those who bought at higher prices. The flag — a weak, low-volume bounce — represents a brief respite where some buyers attempt to catch the bottom while remaining holders hope for a recovery. But the declining volume during this bounce reveals that buying conviction is weak and the rally is running on fumes.
When the stock breaks below the lower boundary of the flag, it confirms that the pause is over and selling pressure has resumed. The measured move target — the pole length projected downward from the flag breakdown — provides the minimum expected decline. Bear flags are particularly powerful in stocks already in established downtrends below their major moving averages, where the path of least resistance is clearly lower. Traders use these patterns for short entries, put option trades, or as warning signals to exit remaining long positions.
Documented by Edwards and Magee in Technical Analysis of Stock Trends (1948) as the bearish counterpart to the bull flag. The bear flag gained increased attention from short sellers like William O'Neil (who studied the pattern for defensive purposes) and short-selling specialists like Jim Chanos and Marc Cohodes. In modern markets, the bear flag has become a key pattern for both dedicated short sellers and long-only traders seeking to avoid or exit deteriorating positions.
Our scanner evaluates the following criteria when detecting Bear Flag setups across 5,000+ stocks daily.
For bear flags, an A+ grade means a pole decline of 20%+ with a flag retrace under 25%, strong volume contraction during the flag, a short flag duration (3-8 bars), and price below both the 50 and 200 SMAs. This is not a prediction of future price movement — it is a way to prioritize which charts deserve your attention first.
Enter short on breakdown below the flag's lower boundary with volume expansion. The flag should have shown declining volume during the bounce before the breakdown occurs.
Place stop above the flag's high (the top of the bounce/consolidation). A move above the flag high suggests the bounce has more substance than a typical bear flag retracement.
Measure the pole decline and project it downward from the flag breakdown point. This gives the minimum expected decline. Take partial profits at intermediate support levels.
This is educational content only. Not financial advice. Always do your own research and manage risk appropriately.