- They are both preceded by an almost straight line move (called a flagpole) on heavy volume.
- Prices then pause for about one to three weeks on very light volume.
- The trend resumes on a burst of trading activity.
- Both patterns occur at about the midpoint of the market move.
- The pennant resembles a small horizontal symmetrical triangle.
- The flag resembles a small parallelogram that slopes against the prevailing trend.
- Both patterns take less time to develop in downtrends.
- Both patterns are very common in the financial markets.
Summary of Flags and Pennants Pattern
Let’s summarize the more important points of both patterns.