Flag pattern usually appears at the early stage of the trend. The Bearish flag pattern was witnessed in July 2019 in the charts of ONGC. The conditions for the bearing flag pattern and the qualifications are explained below.
Conditions and Qualification of pattern:
1) A Steeper pole around 75 ~ 80 degrees – In case of ONGC because the steep pole is formed in two days and around 85 degrees.
2) The flag should form between 4 to 7 days – In this case, it has formed for 7 days.
3) The negative pole should give negative breakout – Witnessed from the chart.
4) The volume during the flag period should be less – This is witnessed from the chart.
5) The Volume at breakout should be higher – Witnessed from the chart.
The Trading plan: SHORT
Entry price: Rs.148 (When the price breaks out downside the lowest point of the flag)
Stoploss: Rs. 155.5 (Highest point of the flag)
Target: Rs.140.5 (Considering the Risk to Reward of 1:1)
Trade result: The target achieved in 8 days.