Pennants

A pennant is a continuation pattern similar to flags for technical analysis. It consists of a large movement known as a flagpole, followed by a convergence trend-line pennant, which is considered as a period of consolidation, and a breakout movement in the same direction as the first large movement. It is a useful trading tool since it results in extremely low-risk trading opportunities and profitable returns. The volume in a pennant is very important to look at because the period of consolidation should have lower volume and the breakouts occur on higher volume.