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Chart Patterns
The Pennant, Explained
A violent move, then a brief tightening coil. The pennant is the market catching its breath mid-run.
NoVo Options Trading · 2026
A pennant is a continuation pattern: a sharp, near-vertical move (the "pole") followed by a small symmetrical triangle of consolidation (the "pennant"), before price resumes in the pole's direction. It's the market pausing briefly after an impulse move.
Pennant vs flag
A pennant and a flag are close cousins — both are brief consolidations after a strong move. The difference is shape: a flag is a small parallel channel (a rectangle tilted against the trend), while a pennant is a small converging triangle. Both signal the same thing — a pause before continuation.
Why the pole matters
The pole must be a genuine impulse — a fast, high-volume move driven by real force (news, a squeeze, a breakout). The consolidation should be tight and low-volume, showing brief profit-taking rather than a real fight. A pennant without a strong pole is just a small triangle in chop, and it means nothing.
No pole, no pennant. The pattern is only as good as the impulse that created it.
The honest read
Pennants work in trending, momentum regimes and fail in choppy ones — the same rule that governs every continuation pattern. Wait for the break out of the coil on renewed volume, confirm it aligns with the larger trend, and treat it as one input alongside structure — not a mechanical signal.
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NoVo is a software tool for market analysis and for executing trades you initiate, not financial advice. This article is general education, not investment advice. Options trading involves substantial risk of loss, up to and including your entire capital. NoVo makes no guarantee of profit, win rate, or performance, and past results do not predict future outcomes. You are responsible for your own broker account, configuration, and trading decisions.