Bearish Pennant Pattern: Pole, Squeeze, Break

What it shows

One coloured line traces the pole and the pennant’s four swings, two converging lines with a light fill frame the squeeze, a "Bearish Pennant" label names it, and after the breakout a dotted line runs to a Target label.

How Pravex works it out

1. Only the newest 600 candles are searched. Each swing high is a candle whose high beats all 5 candles before it and is not topped by any of the 5 after it; a swing low is the same test upside down. That second half means a swing is confirmed 5 candles late. If two highs come back to back with no low between them, the lower one is dropped (for two lows, the higher one), so the swings always alternate.
2. The pole runs from the last swing high down to the swing low where the pennant begins. That low is also the pennant’s first point, and three more swings follow: a high, a low and a high. One line runs through the pennant’s two highs and the other through its two lows.
3. It is a pennant only if: the pole is at least twice the pennant’s height at its start; the pole took no more than 1.5 times as many candles as the pennant; the pennant’s highest point climbed back no more than the Pullback limit share of the pole; the end is narrower than 80% of the start, with the upper line flat or falling and the lower line flat or rising; and no close pokes beyond the lines by more than 2% of the end height.
4. The breakout is the first close under the lower line. The target sits one pole length below that line, measured from its price on the breakout candle. Failure level: the pole’s low plus the Pullback limit share of the pole; a high above it before the breakout drops the shape.
5. After the break the pattern carries a status. It reads Awaiting until something happens, Reached once a candle’s high or low gets to the target, Failed if the failure level is crossed before that, and Indefinable if one candle does both.

Settings

Setting	Default	What changing it does
Which patterns to keep	All	Filters the found patterns by status. All shows them all; Awaiting and Reached hides the ones that failed or were indefinable; Only Awaiting leaves just those still heading for their target; Last Awaiting leaves one, the Awaiting pattern that started most recently.
Where targets are drawn	Only Awaiting	Sets which patterns get their dotted target line and Target label: All, Only Awaiting, Awaiting and Reached, or None. Hiding a target does not hide its pattern.
Pullback limit	50	How far, in percent of the pole, the pennant may climb back before the shape stops counting. The same percentage marks the failure level once price has broken out. Unlike the flag, the pennant has no deviation setting: the converging lines are checked by a fixed rule.
Show unconfirmed patterns	off	Off, the default, waits for a close through the breakout line before drawing anything. On draws shapes still waiting for that close, ending in a dotted leg, with the target they would get. That last point follows the most extreme price since the previous confirmed swing and moves while the candle is live.

How traders read it

Think of a pennant as a flag that coils instead of drifting: the move stalls, the range tightens, and a close under the lower line says the earlier fall is resuming. The target copies the pole down from the break.

Run it through made-up prices: the pole drops from 130 to 110 and the pennant’s lower line sits at 114 on the breakout close. Twenty below 114 puts the target at 94.

When it misleads

A pennant needs four swings in a short time, and they have to converge, so on quiet candles you will see few. Because both lines come from only two points each, a single odd swing changes both. Only confirmed swings go into a pattern, yet a drawn one can still change. If a later swing of the same kind goes further, it takes the earlier swing’s place and the pattern moves or vanishes. A breakout on the live candle is also provisional until that candle closes.

Questions and answers

What separates a bearish pennant from a bear flag?

The shape after the pole. A pennant narrows to under 80% of its starting height between converging lines; a flag keeps its lines parallel and drifts flat or up.

Where is the target of a bearish pennant?

One pole length below the lower pennant line, measured at the candle that closes under it.

How narrow must a bearish pennant get?

Its height at the last swing must be under 80% of its height at the first. The upper line has to be flat or falling and the lower line flat or rising.

Why does Pravex show no deviation setting for pennants?

The pennant is defined by its lines narrowing, not by their being parallel, so only Pullback limit is adjustable. The 80% narrowing rule is fixed.

Related: Bullish Pennant Chart Pattern, Bearish Flag Chart Pattern, Triangle Chart Pattern, All Chart Patterns, every indicator.