Now let’s take a look at bullish pennants.
Bullish pennants, just like its name suggests, signals that bulls are about to go a-chargin’ again.
This means that the sharp climb in price would resume after that brief period of consolidation when bulls gather enough energy to take the price higher again.
In this bullish pennant example, the price made a sharp vertical climb before taking a breather. I can hear the bulls stomping and revving up for another run!
Just like we predicted, the price made another strong move upwards after the breakout.
To play this, we’d place our long order above the pennant and our stop below the bottom of the pennant to avoid fakeouts.
As we discussed earlier, the size of the breakout move is around the height of the mast (or the size of the earlier move).
You see, pennants may be small in size but they could signal huge price moves so don’t underestimate ’em!
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