They’re essentially the opposite to bullish pennants: instead of consolidating after a move up, the market pauses on a significant move down. What is a bearish pennant?Ī bearish pennant is a technical trading pattern that indicates the impending continuation of a downward price move. Those traders who have been waiting to buy the market leap in and send it skyward once more. In a bullish pennant, the positive sentiment wins out. This parity between supply and demand causes its price to consolidate.
The buyers that have pushed the market higher then might back off and take profit, while bears sense the potential for a retracement.
In a bullish pennant, strong positive sentiment causes a market to spike higher (forming the pole). Then, when the market begins to break out of the pattern, volume spikes. One extra clue that a bullish pennant is forming is falling volume as price consolidates.
