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A bullish pennant is a bullish continuation chart pattern.
How do you recognise it?
A bullish pennant has two parts:
- The pole: a sharp, decisive rise in price
- The pennant: a short consolidation where price tightens between falling resistance and rising support, until the breakout
Unlike a bull flag, which consolidates in a parallel channel, a bullish pennant forms a triangle. That's where their different names come from.
How do you trade it?
An upward break through the triangle's resistance is a logical buy signal, ideally confirmed by a candle closing above it and increasing buying volume.
You can set the take-profit by projecting the height of the pole upwards from the breakout point.
The stop-loss can go below the pennant's support.
