Figure 4.31. Diagrams of a bullish pennant.
If the original trend is going down, then the formation is a bearish pennant. In Figure 4.32, the
pennant pole is AВ. С, В and D frame the pennant-shaped consolidation. When the market breaks through the support line ВD, the objective price is E. The amplitude of the target price is DE, and it is equal to the pennant pole AB. The price target measurement starts from the breakout point.
Outgoing from prices in Figure 4.32, the height of the flagpole is measured as the difference
139.00 - 119.00 = 20.00. Once the support line is broken at 120.00, the price target is 120.00 – 20.00 =
100.00.
A market example of a bearish pennant is presented on Figure 4.33.
120.00
B