A bear flag has two parts: a flagpole (sharp rapid decline) and a flag (small, parallel upward consolidation). Volume contracts during the flag; a breakdown below the flag's lower boundary on expanding volume confirms the downtrend's continuation.
A technical relief bounce mid-downtrend. After a sharp fall, oversold conditions produce a brief rally forming the flag. Low volume means buying is weak and distribution continues. Breaking the flag signals new selling and accelerated decline.
Enter short when price breaks below the flag's lower boundary with volume expansion. Stop-loss above the flag's high. Target = flagpole length measured down from breakdown point.
The flag's retracement should not exceed 50% of the flagpole. Consolidation should last no more than 20 candles. Low volume during the flag is essential.