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What is a pennant pattern?

In one line: A pennant is a short pause after a sharp price move, where the highs and lows squeeze together into a small point before price breaks out.

Trading glossary · Updated 2026-10-21

What it looks like

A pennant has two parts.

1. The pole: a fast, strong move. Big candles, one direction.
2. The pennant: a short pause where each high is a little lower and each low a little higher. The two lines meet at a point, like a small flag on a ship's mast.

Then price breaks out of the point, often in the direction of the pole.

A simple example

A coin rallies from $1.40 to $1.80 in a few hours. That's the pole.

For the next several candles it pauses:

The gap between high and low shrinks from 10 cents to 2. Buyers and sellers are squeezing together. Then a candle body closes at $1.79, above the pennant's upper line. That's the break.

Pennant vs flag vs triangle

They're easy to mix up.

So a pennant is like a tiny triangle that only counts right after a strong pole. Our bull flag and bear flag guide shows both short pauses side by side.

Why it matters

A pennant is a Continuation shape. The squeeze shows the market resting and making up its mind. The pole tells you which side was in charge before the rest.

The tight range also gives a close, clear stop: just past the other side of the pennant.

A common mistake

Trading the first poke out of the point. As the lines meet, the range gets so small that tiny moves look like breaks. Wait for a candle body to close outside the line. And if the pause drags on far longer than the pole took to form, it's no longer a pennant.

Questions