The Bearish Pennant is a classic continuation pattern that signals the market is likely to resume its downtrend after a short consolidation. It consists of two key components:
🔻 The Flagpole – A strong, impulsive move downward, indicating high selling pressure.
🔻 The Pennant – A brief consolidation with lower highs and higher lows, forming a small symmetrical triangle. This represents a temporary pause before the next leg down.
How to trade it?
1- Identify a sharp downward move (the flagpole).
2- Wait for price consolidation within the pennant.
3- A breakout below the pennant’s lower trendline confirms continuation.
4- Target = The length of the flagpole projected downward from the breakout point.
Why does this happen?
After a strong downward move, some traders take profits, causing consolidation. However, when sellers regain control, the trend resumes with force, leading to another leg down.
⚠️ Pro Tip: Look for increasing volume on the breakdown to confirm the move!
🔻 The Flagpole – A strong, impulsive move downward, indicating high selling pressure.
🔻 The Pennant – A brief consolidation with lower highs and higher lows, forming a small symmetrical triangle. This represents a temporary pause before the next leg down.
How to trade it?
1- Identify a sharp downward move (the flagpole).
2- Wait for price consolidation within the pennant.
3- A breakout below the pennant’s lower trendline confirms continuation.
4- Target = The length of the flagpole projected downward from the breakout point.
Why does this happen?
After a strong downward move, some traders take profits, causing consolidation. However, when sellers regain control, the trend resumes with force, leading to another leg down.
⚠️ Pro Tip: Look for increasing volume on the breakdown to confirm the move!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.