A pennant pattern is a brief pause shaped like a small symmetrical triangle, which forms after a sharp price move. Like the flag, it is a continuation pattern: the market catches its breath before often moving on in the same direction.
How a pennant forms
- A strong, fast move creates the flagpole.
- Price then trades in a small, narrowing range, with lower highs and higher lows, forming the pennant.
- A breakout from the pennant, usually in the direction of the flagpole, completes the pattern.
Bullish and bearish pennants
- Bullish pennant: forms after a sharp rise; traders watch for a break above the upper line.
- Bearish pennant: forms after a sharp fall; traders watch for a break below the lower line.
Pennant vs symmetrical triangle
Both have converging lines. The difference is size and context: a pennant is small and short-lived and comes straight after a strong flagpole, while a symmetrical triangle is larger and can form without a sharp move before it.
Key points beginners should know
- The pattern depends on a strong flagpole; without it, it is not a pennant.
- Volume usually fades inside the pennant and picks up on the breakout.
- Pennants can fail, so plan your stop loss before acting.
See also the flag pattern and our chart patterns guide.
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This article is for education only and is not investment advice. Trading shares, cryptocurrencies, forex and other markets involves risk, including the loss of capital.