What is a Stock Pennant?

The stock pennant is a technical analysis figure used in trading chart analysis, to know the continuation of the trend. It is called "pennant" because of the similarity to small triangular-shaped flags in the graphic.

This type of phenomenon appears when there are corrections in a stock trend: when there is a break in a stock trend, specifically.

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We recognize two types of stock pennants: bulls and bears. Both some and others usually represent a small part of what is the trend that precedes it. That is, the stock market pennant is small but precedes a very strong stock market trend (bullish or bearish).

As we have said, there are two types:

  • Uptrend pennant. This type of pennants occurs when there is an upward trend in assets or, what is the same, that the asset itself is rising very quickly. It is a pennant placed before the stock market rise.
  • Pennant with downtrend. For its part, this type of pennants represents the downtrend of assets or, what is the same, when the asset itself is going down very fast. It is a pennant located before the stock market crash.

As we all know, this may or may not happen in the Stock Market. That is to say, there is randomness in the concurrence of stock-type acts. In addition, we must also admit that even if it happens, it does not have to happen exactly as indicated and whether or not it is a pennant, as we have specified.

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