Bull And Bear Flags Reveal Where Price Could Move Next ~ Technical Analysis

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In this episode, I break down exactly how I recognize these patterns and determine whether they have enough probability for me to put money on the line. Using Coca-Cola stock ticker KO, I start with a five-day 7% decline that developed into a strong bear flag and explain why I generally want at least 65% confidence before taking a trade, with 70% representing a strong setup and 75% being about as good as these patterns get.

I also show you how I use RSI and MACD alongside price action to determine when a flag is maturing and why I prefer roughly a 90-degree angle between the initial move and consolidation. I demonstrate how I calculate potential breakout targets using the flagpole, compare daily and intraday timeframes, and distinguish flags from pennants. I also explain how these patterns can appear sequentially during strong trends, why I avoid chasing setups when RSI reaches extremes, and how I use the 78.6% Fibonacci retracement as my cutoff for determining when a bull or bear flag is no longer valid.

Key Insights In This Episode

✅ Strong bull and bear flags can offer roughly 70% confidence, while 75% setups are considered rare.

✅ Steve requires at least 65% confidence before putting money behind a technical setup.

✅ Coca-Cola's 7% five-day decline provides the episode's clearest bear flag example.

✅ RSI and MACD help confirm whether momentum supports a bull or bear flag breakout.