Pennant
Last updated
Last updated
A Pennant forms right after a strong price move. Think of it like a mini-triangle. Price blasts in one direction (the pole), then consolidates in a small, converging range (the pennant). When price breaks out of that narrow range, it often continues in the original direction.
Flagpole. Look for a sharp move up or down.
Pennant Shape. Price starts narrowing into a tiny triangle.
Volume. Often fades during the pennant, then may pick up on the breakout.
Entry: wait for a clean break past the pennant. Many jump in right as the breakout candle closes.
Stop: place it inside or just outside the pennant to manage risk if price whips back.
Target: measure the length of the flagpole and project that from the breakout to get a possible target.
Confirm the breakout with momentum or volume.
Watch for fakeouts if the pennant is too choppy or if volume is absent.
Combine with other signals, like support/resistance zones, for extra clarity.
Pull up a chart that shows a rapid move followed by a small converging pattern. Mark the flagpole and draw lines around the pennant. Imagine entering on a breakout and placing stops inside the pennant. Use backtesting to see if price reaches the projected target. Repeat across different markets and note your results.
