A chart pattern formation with the shape of a triangle that represents a consolidation and is sometimes interpreted as a continuation pattern
The formation of a pennant is similar to that of a symmetrical triangle except it is identified in the context of a pause from a strong trend. The triangular shape reflects the narrowing of volatility and indecision for the market to “catch” its breath. Conventionally the pennant is interpreted as a continuation pattern, if the previous trend is sharp, and the breakout is strong.
Upon a breakout of a channel in the direction of the trend, a convention target is using the previous swing and projecting the size of that swing in the direction of the breakout.
