What is a 'Pennant'

A pennant is a continuation pattern in technical analysis formed when there is a large movement in a stock, the flagpole, followed by a consolidation period with converging trendlines, the pennant, followed by a breakout movement in the same direction as the initial large movement, the second half of the flagpole.

Pennant



As can be seen in the above picture, there is a large rise in the stock, followed by a converging consolidation period that resembles a pennant and a resulting continuation of the initial trend.

BREAKING DOWN 'Pennant'

Pennants, which are similar to flags in terms of structure, have converging trendlines during their consolidation period and they last from one to three weeks. The volume at each period of the pennant is also important. The initial move must be met with large volume while the pennant should have weakening volume, followed by a large increase in volume during the breakout.

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  1. How do I build a profitable strategy when spotting a Pennant pattern?

    Understand the basics of creating a profitable trade strategy based on the pennant chart pattern, including optimal entry ... Read Answer >>
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    Understand the basics of the pennant pattern, how it predicts trend continuation, and how analysts and traders identify and ... Read Answer >>
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  4. How effective is creating trade entries after spotting a pennant pattern?

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