The Pennant: A Winning Chart Formation

Meir Barak |

A pennant formation can be bearish or bullish. In the pennant formation, the price consolidates while moving in the form of a pennant, as seen in the chart. You need to sketch the pennant in your imagination and then wait for the exit beyond its boundaries, as we see in the chart of SanDisk Corporation ($SNDK) below. 

The technical premise is that at the end of consolidation, at approximately 80% of the pennant’s expected range, a sharp shift in movement should be executed. Usually, the exit from the pennant follows the original trend. In other words: if the stock showed an uptrend before its consolidation in the pennant formation, it is reasonable to assume that the price will break out upward in accordance with the original trend, similar to a bull flag, but without the flagpole. By contrast, if the price consolidates into a pennant while trending down, it is reasonable to assume that a breakdown will occur with a downward movement, similar to a bear flag, but without the flagpole.



Pennant Breakout, SanDisk – SNDK



SanDisk rises immediately when the trading session opens [1], encounters resistance, and consolidates in the pennant form. The pennant breaks out [2] and SanDisk continues rising. The buy position can be at the exit from the pennant, or in the transition above the “flag” area. As you see, this breakout formation is very similar to that of the bull flag, but instead of consolidating beneath the upper resistance line, the price consolidates in the shape of a pennant. Personally, I prefer to trade the bull flag formation –it is clearer and simpler to identify entry positions. That said, the pennant formation is still a valuable tool for traders looking for the right entrance or exit point of a stock.

To learn more about the stock market and to begin your own journey toward financial independence, visit Meir Barak's site Tradenet and check out his book "The Market Whisperer."

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
SNDK SanDisk Corp. n/a n/a n/a 0


Emerging Growth

CMX Gold & Silver Corp.

CMX Gold & Silver Corp is an exploration stage company. The Company is engaged in the acquisition, exploration and development of silver and copper/gold properties in the USA.

Private Markets


Pinterest is a visual discovery and planning tool. Users ("Pinners") use the site and apps to get ideas for their future, such as recipes, places to travel, and products to…

Cross Campus

With over 500 members and operating 80,000 square feet by summer 2016, Cross Campus is one of the country’s top ten shared, collaborative office or "coworking" operators in the US.…