What is a bullish pennant chart pattern?
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.
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. Other Chart Patterns There are other chart patterns out there which make great indicators. Here are some chart patterns which you might find interesting. Head and Shoulders - This is a bad omen for the current trend and signals that the trend will reverse. Bull Flag - This is a simple pattern that normally occurs when the security is going up and signals that it will continue to head up. Ascending Triangle - This pattern can form just before a large upward move in the market. |
