Pennant Pattern

What the Pennant pattern means

Like a flag, a pennant is a brief pause after a strong, fast move. The difference is shape: the consolidation converges to a point rather than drifting in a channel. Because the trend's momentum is intact, price usually continues in the same direction.

How the Pennant is traded

• →Enter on a close out of the pennant in the direction of the pole.
• →The target is roughly the height of the pole added to the breakout point.
• →Stop goes on the opposite side of the pennant from the breakout.
• →The strongest pennants are short, tight, and form on shrinking volume.

Common mistakes

• ✕Trading a pennant with no clear pole, which is just a small triangle.
• ✕Entering before the consolidation breaks.