loading...
A brief pause in a strong move - small symmetrical triangle after a sharp thrust, then continuation
A Pennant is a short-term continuation pattern that forms during a pause in a strong trending move. It looks like a small symmetrical triangle that forms on a pole - the sharp move that precedes it.
The mechanics: After a strong move (the flagpole), traders take profits and the market consolidates briefly. The consolidation creates a small pennant shape as bulls and bears test each other. Then the trend resumes in the same direction.
Pennants are fast patterns - typically lasting 1-3 weeks. If consolidation extends beyond that, it may be evolving into a different pattern like a symmetrical triangle or range.
The Pennant is the flag's sharper cousin - a brief pause during a powerful move. After a strong impulse (the pole), price consolidates in a small symmetrical triangle. Unlike a flag which drifts against the trend, a pennant converges to a point, creating maximum compression.
The converging trendlines represent the negotiation between buyers taking profits and new buyers waiting to enter. Each swing gets smaller as both sides test each other with decreasing conviction. Volume should decline through this consolidation as the market coils.
The breakout from the pennant releases the compressed energy in the direction of the original trend. The sharp pole created momentum, the pennant compressed it, and the breakout unleashes it. This is why the measured move target uses the pole height - the same energy reasserts.
Enter on breakout above pennant resistance with volume...
Below opposite side of pennant or below flagpole midpoint...
Bullish Pennant: Below the lower trendline of the pennant. Bearish Pennant: Above the upper trendline. The converging trendlines define the consolidation - a break the wrong way invalidates.
Measured Move: Project the flagpole height (the sharp move before the pennant) from the breakout point. T1: 50-75% of flagpole. T2: Full flagpole projection. Pennants are high-probability continuation patterns.
Often 1:3 or better. The tight consolidation creates small stops relative to the flagpole-based target.
The Pennant is one of the most reliable short-term continuation patterns. Its strength comes from the clear impulse move (pole) combined with the tight symmetrical compression before the continuation.
The tighter the pennant's consolidation, the more explosive the breakout. Wide, sloppy pennants have lower reliability.
Go deeper with the Academy lesson. Learn advanced setups, volume confirmation, and real trade examples.
Join Academy →