Define the bull pennant before studying its exit: context, boundaries, volume and invalidation belong in the same written research record.
What defines the bull pennant
A bull pennant combines a sharp upward pole with a short converging pause. Falling reaction highs and rising reaction lows compress the pause toward an apex. Identify the pole independently: without it, the drawing may simply be a symmetrical triangle.
The preceding trend and duration
The conventional continuation case expects a brief interruption of the impulse, rather than a long correction or a new base. Compare the pause duration with the time taken to form the pole. A pennant that keeps extending toward its apex may lose the distinction that originally justified the label.
The illustrated pause occupies 11 sessions. Its average volume is 38% of the pole’s average. These are measurements of this drawing, not thresholds that define every pennant or flag.
A close beyond the boundary
This example closes above the upper pennant boundary. Add the pole height to the upper line on the exit session to illustrate the conventional measuring rule. A narrow pause and high volume are context; the boundary close remains the stated confirmation.
| Measurement | Value |
|---|---|
| Event session (leftmost bar is session 1) | 29 |
| Boundary at the exit | 31.80 |
| Close of the exit session | 32.65 |
| Distance beyond the boundary | 2.67% |
| Pole height | 8.00 |
| Conventional projected level | 39.80 |
Illustrative objective = 31.80 + 8.00 = 39.80The projection is a geometric reference. It is not a price forecast, a probability or an instruction to hold until that level. Describe what would contradict the premise before comparing the potential distance with the risk.
Volume through the formation
Compare volume with this stock’s own recent activity and inspect the bars on which it expands. Contracting activity during a pause and expansion at its exit can support a conventional reading, but volume does not choose the direction. A large session may reflect an event, rebalancing or an isolated trade.
| Measure | Hypothetical value |
|---|---|
| Pole, average per session | 181.1 |
| Pennant, average per session | 69.2 |
| Breakout session | 250.0 |
| Breakout ÷ 20-session average | 2.11 |
The displayed relative-volume calculation divides the event’s volume by the average of the 20 sessions ending with that event; it includes the event itself. It differs from a comparison with the prior 20 sessions and from an intraday comparison at the same clock time.
When the conventional reading fails
The second pennant breaks upward, turns back inside and then falls below the lower line and the pause low. The pole did not prevent that failed continuation. Record both the false break and the later invalidation in the research sample.
Separate this shape from nearby patterns
A bull flag uses parallel lines. A symmetrical triangle can be broader and needs no pole. A bear pennant begins with a downward impulse and studies an exit through its lower boundary.
Record a reproducible chart observation
A useful chart record includes the unsuccessful cases. Define your rules before collecting examples and retain the same price scale, adjustment basis and candle interval throughout the sample.
- Record the preceding swing direction, formation duration and each boundary touch.
- Write the exact close-based confirmation and the opposite boundary or swing that invalidates it.
- Compare event volume with its named denominator, and review both resolving and failed drawings.
- Check whether a scheduled event, such as an earnings report, falls inside the window you are studying; using earnings dates in research covers where such dates come from.
- Inspect the same stock on the Symbol Analysis guide, then record your observations in a trading journal.
These guides teach manual chart interpretation. A near-high or range screen lists candidates to inspect; it does not identify this formation.
Continue with
- Support, resistance and trendlinesHow horizontal levels and sloping lines are drawn and tested.
- Breakouts and pullbacksWhat a close beyond a level shows, and how retests are read.
- Put stock volume in contextCompare a session’s volume with the same stock’s usual activity.
- Candlestick patternsSingle- and multi-session candle shapes read alongside chart patterns.
- Stop-loss and profit targetsWhere invalidation levels and objectives fit in a written plan.
Sources
Read our data and methodology notes for calculation context. This guide explains research tools and observations. It does not recommend a trade or investment.