A Bear Flag is very similar to a Bear Pennant. It is a technical price pattern that indicates bearish price action. It starts with a swift move to the downside (flag pole) on strong volume, followed by consolidation (flag) on decreasing volume, and finally a push below consolidation support on slightly higher volume. This is considered a continuation pattern as a result of the downside move that takes place after the initial spike to the downside.
Technical Trader's should wait for the consolidation support break on slightly higher volume before entering a short position based on a Bear Flag formation. This will greatly increase the probability of success.
Below is an example of a Bear Flag in real life. The area within the white oval represents the pattern. You will notice a swift downside move, followed by consolidation, followed by continuation to the downside.
Related terms: bull pennant pattern, bull flag pattern, bear pennant pattern
See also: Neutral Sentiment, Consolidation, head and shoulders, inverse head and shoulders