Bearish Pennant Pattern
Original schematic showing the guide's principal visual relationships.
Downward flagpole → small symmetrical consolidation → close below lower boundary.
Pattern anatomy
A brief converging consolidation after a sharp decline that may resolve lower.
Downward flagpole → small symmetrical consolidation → close below lower boundary.
How it works
Identify the prior trend first, mark repeated swing highs and lows, then draw only the support, resistance, or neckline justified by those pivots. A pattern remains provisional until price closes beyond its confirmation boundary; visual resemblance alone is not enough.
How to read it
The pause shows temporary balance after forceful selling. Continuation becomes actionable only after the lower boundary gives way.
Practical example
After a sharp selloff, price pauses in a small converging range. A close below the lower boundary with expanding participation confirms continuation; an upside break indicates that sellers failed to restart the prior decline.
Confirmation checklist
Confirm a clear impulse before the consolidation, controlled price compression during formation, and a close beyond the continuation boundary. Volume often contracts during the pause and expands on breakout.
Limitations and false signals
A breakout above the pennant can start a reversal. Large, slow formations should be evaluated as triangles instead.
Limitations and false signals
Frequently asked questions
What does this pattern or indicator describe?
A brief converging consolidation after a sharp decline that may resolve lower.
How should the signal be confirmed?
The pause shows temporary balance after forceful selling. Continuation becomes actionable only after the lower boundary gives way. Confirm a clear impulse before the consolidation, controlled price compression during formation, and a close beyond the continuation boundary. Volume often contracts during the pause and expands on breakout.
What can cause a false signal?
A breakout above the pennant can start a reversal. Large, slow formations should be evaluated as triangles instead.