What Is Pennant?
A pennant is a short-term continuation pattern similar to a flag, but instead of a channel, the consolidation takes the form of a small symmetrical triangle (converging trendlines). Like flags, pennants form after strong directional moves and represent brief pauses before the trend resumes.
How Pennant Works
The pennant forms as the post-impulse volatility contracts rapidly, creating converging support and resistance lines over 1-2 weeks. Volume dries up during formation. The breakout — almost always in the direction of the prior trend — occurs on expanding volume. The measured move target is the same as with flags: the flagpole distance projected from the breakout.
Why It Matters for Traders
Pennants and flags together account for many of the best continuation entries in trending crypto markets. The key distinction from a reversal pattern is the strong, impulsive move preceding it (the flagpole). Without a strong preceding move, the pattern is just a symmetrical triangle with 50/50 directional odds rather than a high-probability continuation.
