Flag and Pennant Chart Patterns
Explained
Learn about flag and pennant continuation patterns, including the flagpole concept and how they differ from each other.
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This lesson explains flags and pennants, short-term continuation patterns that share a common originating structure but differ in their consolidation shape.
This structure has been verified against multiple technical analysis education sources.
The Flagpole
Both flags and pennants are generally preceded by a sharp, near-vertical price move, referred to as the "flagpole" — a strong rally for a bullish setup, or a steep decline for a bearish setup, reflecting a strong momentum move as covered in the earlier candle size and momentum lesson.
The Flag Pattern
Following the flagpole, a flag forms as a small, roughly parallel channel that slopes counter to the prior move — for example, a shallow downward-sloping channel following a bullish flagpole. This connects to the price channel concept covered in the earlier Trend Lines and Price Channels unit.
The Pennant Pattern
Following the flagpole, a pennant forms as a small, symmetrical triangle (converging to a point, similar in shape to the symmetrical triangle covered in the previous lesson, but generally smaller and shorter in duration).
Why These Are Generally Discussed as Continuation Patterns
Both flags and pennants are generally discussed as reflecting a brief pause or consolidation after a strong move, with the prevailing trend commonly discussed as tending to resume once the pattern completes with a breakout in the direction of the original flagpole. As with all patterns in this unit, this is a general tendency, not a guaranteed outcome.
🔖 Summary
Both flags and pennants are preceded by a sharp 'flagpole' move, with a flag forming as a small parallel channel sloping counter to that move, and a pennant forming as a small, converging symmetrical triangle. Both are generally discussed as continuation patterns, with the prevailing trend commonly discussed as tending to resume in the direction of the original flagpole once the pattern completes, though this remains a general tendency rather than a guaranteed outcome.
Frequently Asked Questions
What is a flagpole?
The sharp, near-vertical price move (rally or decline) that precedes both flag and pennant patterns.
How does a flag differ from a pennant?
A flag forms as a small parallel channel sloping counter to the prior move, while a pennant forms as a small, converging symmetrical triangle.
Are flags and pennants generally continuation or reversal patterns?
They're generally discussed as continuation patterns, with the prevailing trend tending to resume once the pattern completes.
In which direction do flags and pennants generally break out?
Generally discussed as breaking out in the direction of the original flagpole, though this remains a general tendency, not a guaranteed outcome.
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