Pennant

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.

RELATED TERMS
  1. Flag

    A technical charting pattern that looks like a flag with a mast ...
  2. Symmetrical Triangle

    A chart pattern used in technical analysis that is easily recognized ...
  3. Triangle

    A technical analysis pattern created by drawing trendlines along ...
  4. Technical Rally

    An upward movement in a security's price following a declining ...
  5. Breakout

    A price movement through an identified level of support or resistance, ...
  6. Volume

    The number of shares or contracts traded in a security or an ...
Related Articles
  1. Charts & Patterns

    Continuation Patterns: Rectangles and Pennants

    Flags and pennants indicate direction of activity of the prevailing trend. Learn how.
  2. Charts & Patterns

    Analyzing Chart Patterns: Flags And Pennants

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com The flag and pennant patterns are two continuation patterns that closely resemble each other, differing only in their shape ...
  3. Trading Strategies

    Introduction To Technical Analysis Price Patterns

    To "find your game" in technical analysis, you need to be able to recognize reversals and continuations as they form.
  4. Charts & Patterns

    Continuation Patterns: An Introduction

    Those random movements in the charts actually form patterns. Learn the basics of what these patterns are.
  5. Chart Advisor

    Healthcare Stocks Continue to Be a Good Bet

    Here are four stocks in the healthcare sector that have already put up big numbers, and could still go higher, if they breakout to the upside.
  6. Charts & Patterns

    Analyzing Chart Patterns: Conclusion

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com This introduction to chart patterns has provided a broad overview of chart pattern analysis and several of the largest patterns. ...
  7. Chart Advisor

    Pay Close Attention to These Three Stocks (SIG, WY)

    These three stocks are on the cusp of a potentially big move, likely soon.
  8. Investing

    The No. 1 Home Improvement Retailer To Buy Based On The Charts

    The S&P 500 finally managed to close above the psychologically important round number of 2,000 last week. However, on both the daily and weekly chart, there is troublesome momentum divergence, ...
  9. Trading Strategies

    Technical Analysis: The Importance Of Volume

    By Cory Janssen, Chad Langager and Casey MurphyTo this point, we've only discussed the price of a security. While price is the primary item of concern in technical analysis, volume is also extremely ...
  10. Chart Advisor

    Recent Flag Pattern Breakouts

    A flag is a small continuation pattern, and these four stocks recently broke out of one, or are close to it.
RELATED FAQS
  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 >>
  2. How are pennant patterns interpret by analysts and traders?

    Understand the basics of the pennant pattern, how it predicts trend continuation, and how analysts and traders identify and ... Read Answer >>
  3. What are the most common continuation candlestick patterns?

    Learn about the four most common types of continuation patterns found in candlestick charts: triangles, rectangles, flags ... Read Answer >>
  4. What are some common strategies used when a stock is under consolidation?

    Read more about what trading opportunities can be realized while a stock is under consolidation and trading within a seemingly ... Read Answer >>
  5. Why is the Ease Of Movement Indicator important for traders and analysts?

    Read more about the ease of movement indicator, a technical momentum oscillator created by Richard Arms to track price changes ... Read Answer >>
  6. How do I use the Ease Of Movement Indicator to create a forex trading strategy?

    Discover how forex traders can apply the ease of movement indicator with currency pairs to and highlight how sensitive price ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center