Dictionary

Pennant

A small symmetrical triangle that forms directly after a sharp move, with both boundaries converging over just a handful of bars.

The bull flag. A sharp advance (the pole) followed by a small channel that drifts gently lower (the flag); here the advance then resumes out of the channel. A bear flag is the same shape upside down: a fast drop, then a slow drift higher.

A pennant is a compressed symmetrical-triangle: highs fall, lows rise, and the shape resolves quickly. It differs from a bull-flag mainly in that a flag drifts in a channel while a pennant contracts to a point.

Because it is small and forms quickly, a pennant gives a very tight stop, which is the whole attraction. The flip side is that small patterns are noisy and produce more false triggers than larger ones.

Pennants are also where chart-clutter does real damage: on a fast chart you can find one nearly anywhere. Requiring a preceding impulse of a defined size, such as a multiple of atr, is what separates a pennant from ordinary chop.

Educational only, not advice. Spotted an error? Post in Site Feedback.