What Is a Pennant Pattern in Technical Analysis?

Author

nxt global

Published

October 24, 2025

Introduction

Chart patterns are an essential tool to determine where a cost will most likely move in trading. One of such strong continuation patterns is the Pennant Pattern It marks the continuation of a bullish or bearish trending market after a time for consolidation. Being able to see and trade this pattern correctly can assist you in taking full advantage it (and reduce the risk of missing out).

At NXT Institution, which is the best trading academy in Malappuram and the best forex trading institute in Perinthalmanna, we train students to confidently recognize and trade pennants patterns for profits in both stock and forex markets.

What Is a Pennant Pattern?

A Pennant Pattern is a continuation pattern formed by strong trending moves followed by brief periods of consolidation, and then another trending move in the same direction. Yes, it’s a little inverted symmetrical triangle between the converging trendlines for this time of consolidation.

Double Bottom A double bottom can occur in a bull or a bear market:

Bullish Pennant: This is formed after an aggressive upwards move and signals that a trend will continue moving up.
Bearish Pennant: It forms after a sharp down move and indicates that the downtrend is likely to continue.

Structure of a Pennant Pattern

The pennant has 3 main components:

Flagpole: A powerful and mostly straight, upward price action develops prior to the pennant.
Pennant (Triangle): Brief sideways price movement of H and the L.
Breakout; This is when price breaks out of the pennant formation, in the direction they was moving at before it started to pause.

This kind of movement is usually observed on smaller time frames, but it can happen in the biggies as well so that traders can have multiple entries.

How to Identify a Pennant Pattern

Conclusion spot valid pennant pattern Here are what you would search for in identifying a valid pennant pattern:

An aggressive price move (the flagpole) forms the trend on the price chart.
A little triangle back with a slope that’s ultimately against the original direction.
Breakout in the direction of an initial move, indicating a continuation.

The pennant pattern is generally traded along with the volume for more reliable signals traders wait until there is some kind of a spike upon breakout.

How to Trade Using the Pennant Pattern

Here’s how you can use the pennant pattern to conduct your own educated trades:

Identify the Trend:

Identify a powerful move upward or downward forming the flagpole.

Wait for Consolidation:

The pennant (triangle) develops as consolidation. Don’t take trades until this is formed.

Confirm the Breakout:

The trade is entered when the price breaks out of the pennant formation in the direction of the trend.

Set Targets and Stop-Loss:

Take-profit: Height of the flagpole added to (bullish) or subtracted from (bearish) the breakout point.
Stop-loss: Set it a little outside of the other side of the pennant.

At NXT Institution, which is the best forex trading institute in Malappuram,media-line-4 students learn to combine pennant pattern with other tools such as moving averages, support and resistance levels, volume indicators for a high probability of trades.

Advantages of Trading Pennant Patterns

Helps identify trend continuation opportunities.
Effective in bullish or bearish market conditions.
Simple enough and useful for all trading styles.
Can be used with other indicators for more accurate entries.

Conclusion

By achieving the correct setup and risk management, traders can learn to trade pennant patterns whilst benefiting from significant market moves.

The Pennant Pattern is a strong continuation pattern and allow traders to catch a good breakout after an existing trend. Knowing how to identify and trade them can really give your a trading an edge.

For those who are seeking to learn advanced stock market technical analysis and chart patterns, make sure you’re signing up with NXT Institution the top trading academy in Malappuram and the best forex trading institute in Perinthalmanna as our skilled mentors will provide hands-on training sessions on how to apply these concepts in real world and use it as profitable trading strategies.