Pennant
A Pennant is a short-term continuation chart pattern consisting of a sharp directional price move (the flagpole) followed by a brief symmetrical triangular consolidation where price converges between converging support and resistance lines, historically observed as a brief pause in a strong trend before directional continuation.
The Pennant shared structural similarity with the Flag Pattern in requiring a preceding flagpole — a sharp, high-momentum directional move — followed by a consolidation. The difference was the shape of the consolidation: where a Flag showed parallel, rectangular bounds drifting countertrend, the Pennant showed converging bounds, creating a small symmetrical triangle that tapered to a point. The visual result was indeed a pennant shape — a triangular flag on a pole.
The converging boundaries of the Pennant indicated that volatility was compressing during the consolidation. Each successive price swing was smaller than the last; the market was tightening into a coil as the consolidation proceeded. This compression of volatility, occurring on declining volume, was interpreted as a period of equilibrium that historically resolved in the direction of the prior trend when one side finally asserted dominance and broke price out of the narrowing range.
In the Indian equity market, Pennants were studied on intraday charts of index futures and on daily charts of individual stocks. In high-momentum trending environments — such as during phases of strong sector rotation into financials, IT, or consumer discretionary sectors — individual Nifty constituents or mid-cap growth stocks in strong uptrends occasionally formed Pennant consolidations before resuming their advances. Technical analysts evaluating these formations considered both the length of the flagpole (a longer pole implied more momentum) and the duration of the Pennant's consolidation (tighter and shorter generally implied the consolidation was absorption of the pole's move rather than a broader trend change).
Volume patterns within Pennants were structurally similar to those in Flags: declining volume through the consolidation (as the range compressed) followed by a surge in volume at the breakout. In Indian equity markets where institutional trading was significant, the breakout session's volume relative to the 20-day average was monitored closely. Breakouts on volume that was multiple times the daily average were considered more reliable than those on barely above-average volume.
The measured move projection for Pennants mirrored the Flag method: the height of the flagpole was projected from the breakout point as a reference for the potential continuation of the move. Practitioners in Indian markets applied this projection not as a price guarantee but as a way of assessing whether the reward profile relative to the defined risk (typically a close below the Pennant's lower boundary) was consistent with their analytical frameworks.