What is a bullish pennant chart pattern?

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A bullish pennant chart pattern is a trend continuation pattern. It is very similar to a bullish flag pattern. It consists of a large rise up, this is called the pole. Then the stock consolidates. Finally it rises up and breaks resistance.

In this example the stock rose up from $48 to $54. When it hit resistance at $54 it came down. Then it stayed in a narrow range going slightly down ward. Finally it broke above $52. This became a buy signal.

TargetThe target on bullish pennant chart pattern is equal to the length of the pole plus resistance. In this example the pole length would be $54.3 - $48 or $6.3 dollars. The resistance is $52. So the target would have been $52 + $6.3 = $58.3. This pattern hit that level and leveled out.

If someone traded this pattern they could put a stop under resistance of $52 to protect them self from big losses. Then either follow it up or wait for the stock to hit its target, depending on your strategy.