Inside technicals and chart patterns by 
Let me start by saying that what a lot chartist might call a channel — if it is short and wide –I will consider a “flag”. So refer to the Wave to determine which it will be. If the pattern is a confirmed channel it will be occurring in a downtrend which is a four to six clock direction on the Wave. We don’t have that so the channel confirmation is out. That leaves us with a potential bull flag. I don’t automatically consider an unconfirmed channel a flag but the channel is relatively short and wide and that opens the door to a flag. Since the market cycle is more of a sideways distribution cycle: Hello flag pattern!
Trading flags and channels are pretty similar so the plan is to watch the downtrend line resistance for a potential exhaustion play (short the ceiling) or a breakout if this level is broken to the upside. The distinguishing characteristic of a downward angling flag is that it is widely interpreted as a reversal pattern so many traders will be watching for a breakout through the resistance level.
Add to the analysis a low Initial Trend from the Autochartist alert and the market is signaling that the current downtrend may be taking a breather.