Bearish Flag Pattern Analyze - Top Reversal
It is a YC trend inversion bearish pattern that tends to form at market tops after an uptrend and a consolidation range.
- Initial Uptrend: The market exhibits a clear upward trend before the reversal setup.
- Trading Range: A pause forms a trading range.
- False Breakout: The market appears to continue upward before failing.
- Reversal: The market then reverses and confirms bearish control.
Wait for at least two valid bounces and a clean structure before planning entry.
- Entry Point: Bearish entry is when the price closes below the lower limit of the trading range.
- Velocity: The rise should be slower or equal to the speed of the subsequent decline.
A bearish setup is confirmed after breakdown and controlled retest near the key level. Place stop loss above invalidation.
- A stop loss should be set above the upper boundary of the trading range or above the recent high.
- Pattern failure is indicated if price rises above the upper boundary again.
Historical cases show meaningful downside when confirmation and risk management are respected.