Pennant
Volume Price Analysis glossary · Wyckoff'S Laws & The Four Market Phases
Definition
A symmetrical triangle congestion pattern with converging upper and lower boundaries; signals a compressed coiled spring where a powerful breakout is imminent in either direction.
Pennant in plain English
Picture squeezing a spring between your hands: the more you compress it, the harder it eventually snaps out. A pennant is that spring on a price chart. After a sharp move, price starts making smaller and smaller swings — the highs get lower and the lows get higher, so the up-and-down range narrows into a little triangle. That tightening means buyers and sellers are in a tense standoff, and when one side finally wins, price often bursts out fast. The catch: the pennant alone doesn't tell you WHICH way it'll break, so a careful trader watches the volume on the breakout to judge whether the escape is real.
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