What Is Pennant?
A pennant looks like a small symmetrical triangle following a sharp move (the 'pole'). Lower highs converge with higher lows over several bars, forming a tight wedge before the trend resumes. It's a cousin of the flag — same concept, different shape.
Direction of breakout typically matches the prior trend, with the same target rule as flags (pole length projected from breakout). Pennants resolve quickly — usually within 1-3 weeks on daily charts. If the consolidation drags on, it's no longer a pennant and the trade thesis is broken.
Volume should dry up during the pennant and then expand on the resolution. Pennants form because of profit-taking after a thrust, followed by re-accumulation. Failed pennants — where the breakout reverses immediately — often warn of trend exhaustion.
Related terms
- Flag Pattern — Short consolidation after a strong move, typically resolving in the same direction.
- Breakout — A price move beyond an established support, resistance, or chart pattern boundary.
- Trend — The general direction of price movement over a period — uptrend, downtrend, or sideways.
- Ascending Triangle — Bullish continuation pattern with a flat ceiling and rising support.