Bearish Flag Pattern Analyze - Top End Sweep
A bearish continuation pattern that signals the continuation of a downtrend after a brief consolidation period.
Pattern Overview
It is a YardCharts market reversal bearish pattern comparable to an imaginary right triangle. It is made up of two sides that meet at a 90 degree angle, linked by a hypotenuse.
Horizontal Line (Long side): Connects two or more roughly equivalent market lows.
Vertical Line (Short side): Extends from the horizontal to the highest point above it.
Hypotenuse: Connects ascending market highs, reflecting bounces above the horizontal.
Formation
Wait for at least two valid bounces and a clean structure before planning entry.
Requires at least two, ideally three, bounces with ascending highs above the horizontal line.
Preferably, the up-move should have more or equal bars than the down-move.
Signal Confirmation
A bearish setup is confirmed after breakdown and controlled retest near the key level. Place stop loss above invalidation.
The pattern is confirmed after a breakdown below the horizontal and a retracement close to that level.
A stop loss should be set just above the last bounce high or within a trader-defined percentage.
Historical Performance
Historical cases show meaningful downside when confirmation and risk management are respected.
Some Examples
