Pennant

Pennant

What is a pennant?

A pennant is a triangular continuation pattern formed after a strong price movement. It is used in technical analysis to help make trading decisions.

How do pennant patterns form?

After a sharp move in a particular direction, there is neither significant buying nor selling and the market price is temporarily held in a consolidation pattern.

Because of this indecision, a more or less symmetrical triangle is formed. This is a pennant pattern.

The price eventually breaks out of this pattern, continuing the original trend.

The bullish pennant and bearish pennant

A bullish pennant forms during an uptrend and indicates that the price may continue to go up. It gives you the chance to make a long trade, hopefully profiting from a second big price rise.

The chart below shows an example of a bullish pennant:

bullish pennant tradipedia

To learn more about how to identify and trade the bullish pennant, read our lesson:

Lesson
Learn how to identify the bullish pennant in a uptrend and how to use it to look for possible buying opportunities.
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A bearish pennant is the exact opposite of a bullish pennant. It forms during a downtrend and indicates that the price may continue to go down. A bearish pennant gives you the chance to make a short trade, hopefully profiting from a second big fall in price.

The chart below shows an example of a bearish pennant.

bearish pennant tradipedia

To learn more about how to identify and trade the bearish pennant, read our lesson:

Lesson
Learn how to identify the bearish pennant in a downtrend and how to use it to look for possible selling opportunities.
You haven't attempted the quiz yet.
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