The bull pennant is a bullish continuation pattern very similar to the bull flag but with a key structural difference: instead of a parallel channel, the consolidation phase forms a small symmetrical triangle, the pennant, as price coils tightly before the next upward leg. Bull pennants are prized by traders for representing short, high-conviction consolidations after powerful impulsive moves, and the breakouts from pennants tend to be sharp and fast. This guide covers the full structure, psychology, entry rules, and risk management for trading the bull pennant.
What is a bull pennant?
The bull pennant is a bullish continuation pattern with a strong upward move (flagpole) followed by a brief consolidation forming a small symmetrical triangle (pennant). The converging trendlines create a pennant shape before price breaks out upward.
Pattern structure
- Flagpole: Strong upward move on high volume.
- Pennant: Small triangle with converging trendlines.
- Volume: Decreases during pennant formation.
- Breakout: Price breaks above upper trendline with volume.
- Continuation: Uptrend resumes.
How to identify
Must form during clear uptrend with strong flagpole.
Pennant should be brief, typically 1-3 weeks on daily charts.
Trendlines converge to form small triangle.
High on flagpole, low during pennant, high on breakout.
Trading the pattern
Entry rules
- Conservative: Wait for candle close above pennant.
- Aggressive: Enter on breakout retest.
- Volume: Confirm with increased volume.
- Timeframe: H4/D1 most reliable.
Stop-loss placement
Below pennant's lowest point.
Below pennant's lower trendline.
Profit targets
Measure flagpole height, project upward from breakout.
- Flagpole = 200 pips
- Breakout at 1.1000
- Target = 1.1200
Common mistakes
Wait for confirmation.
Pennants should be brief.
Always protect capital.