How to Analyze Pennant Pattern Chart Pattern
How to Read Pennant Pattern
There are two types of xauusd trading pennant patterns - bullish pennant chart pattern and bearish pennant chart pattern setup.
To trade these chart setups one requires to learn about the analysis of bull pennant chart pattern and bear pennant pattern.
Bull Pennant Pattern
Bull pennant pattern forms what looks like a rectangle pattern with a slight downwards tilt. The rectangle is formed by two parallel lines that act as support level and resistance level for the price til the price breaks out. In general, the bull pennant pattern won't be perfectly flat but it'll be sloping & having a slight tilt.
The bull pennant chart pattern is found within an upwards trend. Bull pennant pattern is a continuation chart pattern where the price retraces slightly, bull pennant pattern setup is therefore a slight price pull back with narrow price action that has a slight downward tilt. Buy signal gets generated when price penetrates the upper line of the bull pennant chart pattern. The pennant portion of the bull pennant chart pattern setup has price highs & price lows which can be joined by small lines which are parallel, giving it what resembles a small channel - a pennant.
The bull pennant pattern occurs at halfway point of a bullish upward trend & after a price breakout a similar move equal to the height of the pennant pole is expected.
Bull Pennant Chart Pattern - How to Analyze a Bull Pennant Pattern
The bull pennant pattern setup shown above was just a consolidation period as the market gathered momentum to break out and move higher. The bull pennant chart pattern setup continuation signal was completed when the upper line of this Bull pennant pattern setup was broken to the upside after which the price continued heading upwards.
Bear Pennant Chart Pattern- How to Read Pennant Pattern
This bear pennant chart pattern setup is found in a down-wards trend. The bear pennant pattern is a trend continuation pattern where the price retrace slightly with a narrow price action that has a slight upwards tilt. Sell signal gets generated when price penetrates the lower line of the inverted bear pennant pattern. Pennant portion of this bear pennant pattern has price highs & price lows which can be joined by small lines which are parallel, giving the bear pennant trading pattern the look of a small channel - inverted pennant.
Bear Pennant Chart Pattern - How to Analyze a Bear Pennant Pattern
The bear pennant pattern setup above was just a consolidation period for the market trend prior to more selling & resuming of the down-wards trend. The continuation signal from the bear pennant chart pattern was completed when lower line of this bear pennant pattern was broken to the downside after which the price headed downwards.
How Do You Interpret Pennant Pattern
