While both the symmetrical triangle and the pennant are continuation patterns with a good degree of reliability, there are some key differences between the two in terms of their formations.
Both the symmetrical triangle and the pennant have conical bodies formed during a period of consolidation. Price consistently reaches higher lows and lower highs, creating two converging trendlines that form this conical shape. However, the pennant includes a flagpole at the beginning of the pattern, which is not present in the formation of the symmetrical triangle. The flagpole is a very important characteristic of the pennant and is created when price suddenly spikes or dives dramatically in the direction of the current trend, forming an almost vertical line. This sharp move is accompanied by heavy volume and marks the beginning of an aggressive move within the current trend. Price then pauses, forming the body of the pennant, before breaking out in the direction of the trend with renewed vigor.
A second difference between the symmetrical triangle and the pennant is their durations. The pennant is considered a short-term pattern that forms over a period of days or possibly weeks. Ideally, a pennant pattern lasts between one and four weeks. A triangle pattern can take much longer, sometimes forming over the course of months or years. In fact, if a pennant pattern drags on into its 12th or 13th week, it is usually considered to have become a triangle.
The breakout after a pennant pattern should occur at or near the point where the trendlines converge, called the apex. When dealing with a symmetrical triangle, however, it is optimal for price to break above or below the trendlines one-half to three-quarters of the way through the pattern. This means the pattern often never reaches its apex, forming a flat-topped cone rather than an actual triangle. A breakout is eventually forced one way or the other as price nears the apex. However, a breakout too early or too late may be indicative of a weaker pattern and a less robust continuation.