![What is Bearish Pennant Pattern?](images/what-is-bearish-pennant-pattern.jpg)
The Bearish Pennant pattern is a bearish continuation pattern in technical analysis that signals a potential continuation of a downtrend. It is formed by a sharp downward move in price, followed by a period of consolidation in the form of a small symmetrical triangle, which resembles a pennant.
Traders typically identify the Bearish Pennant pattern by drawing trendlines connecting the highs and lows of the consolidation period, which converge towards the apex of the triangle. The pattern is confirmed when the price breaks below the lower trendline on higher-than-average trading volume.
Traders often use the Bearish Pennant pattern as a signal to sell, with a price target set based on the height of the pennant. It is important to note that not all Bearish Pennant patterns will result in a continuation of the downtrend, and traders should use caution and consider other technical indicators and market factors before making any trading decisions based solely on this pattern. |