A pennant is a type of consolidation pattern in technical analysis that develops after a security experiences a major movement, or the flagpole, followed by a sideways move in price action. During this consolidation period, two diagonal and converging trend lines can be drawn to form what looks like a pennant. At some point when price breaks out of the pennant consolidation, the expectation is that price will resume the movement in the same direction of the previous trend, prior to the consolidation period.
The market has been range bound for the last few weeks with volatility on the decline, and earnings all over the place. So where to go to look for a trade? Nike has already had Earnings and is near a low of the year, so seems like a good option. As a contrarian that can mean only one thing to me: I have to make a trade with the assumption it will go up from here over the next 45ish days. We will do that by making a Long Call Vertical trade to bet that it starts to head up over the next couple months. For more on my trading and how to join me in real time, see below. Watch the video to get the details. Kal Trading Risk Disclaimer All the information shared in this video is provided for educational purposes only. Any trades placed upon reliance of SharperTrades.com are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, commodities, options and forex, there is also substantial risk of loss. All tr