Forex glossary
Pennant
A pennant is a short consolidation with converging boundaries after a distinct flagpole move. A breakout in the pole's direction is interpreted as a possible continuation. It differs from a flag's parallel channel; projecting pole height provides a conventional target rather than a guaranteed outcome.
Illustrative example
How does it work in practice?
Assume a rise from 100 to 110 followed by a short range narrowing from 108–110 to 108.8–109.4. This is a pennant candidate; narrowing alone does not determine the direction of a later breakout.
A case to work through
Narrowing without a pole
Hypothetically, price ranges between 50 and 55 for a long period before boundaries narrow to 52–53.
- The converging boundaries can describe a triangle.
- The description lacks the distinct preceding pole needed for the classic pennant label.
What follows? Do not label it a pennant solely because it is small.
Example boundary: Duration and scale depend on the method; breakout direction is unestablished.
A useful distinction
Pennant / Triangle
A pennant is brief narrowing after a pole; a general triangle does not require that same preceding move.
Check your understanding
Identify a missing preceding move in a pennant candidate.
Show the answer and explanation
A distinct preceding pole move
Converging boundaries alone are insufficient.
Geometry and pattern completion
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Read the fuller explanation
Related terms
Sources and documentation
- StockCharts – flags and pennants
A preceding pole and parallel or converging short consolidation boundaries.
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