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Finance GlossaryPennant Pattern
Pennant Pattern
Definition of Pennant Pattern
A Pennant is a continuation chart pattern used in technical analysis, and is shaped like a small, symmetrical triangle or a flag. It is formed following a sharp, significant move in price (either up or down) and represents a brief consolidation phase where volume is declining. The pennant pattern is characterised by two converging trend lines. Once the consolidation is over, a breakout from the pennant pattern (in the direction of the initial move) is anticipated, which indicates a continuation of the previous trend. Traders look for a large volume to accompany the breakout to confirm the move.
Related Terms
Bottom Up Investing
Bottom-up investing is a stock picking strategy that uses analysis of individual companies and shares for decision-making instead of focusing on the broader economy, market, or industry.
Triple Top
A triple top is a bearish chart pattern where a stock or index reaches the same resistance level three times but fails to break above it. This repeated failure signals weakening buying momentum and a potential trend reversal from uptrend to downtrend. For example, if a stock rises to ₹500 three times over several months and falls each time, it may form a triple top, indicating a possible decline ahead.
Cost Inflation Index
A Cost Inflation Index or CII is used to calculate a financial security’s price after adjusting for inflation.
Cost Of Carry
Cost Of Revenue
Cover Order
Covered Call Option
Covered Interest Arbitrage
Covered Put
Cross Currency
Currency Futures
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Currency Trading
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Custodian
Cyclical Stocks
Cost Of Carry
Cost Of Revenue
Cover Order
Covered Call Option
Covered Interest Arbitrage
Covered Put
Cross Currency
Currency Futures
Currency Options
Currency Trading
Current Assets
Current Liabilities
Current Ratio
Custodian
Cyclical Stocks
Donchian Channels
A Donchian Channel is the area between upper (highest price) and lower (lowest price) bands formed around the median as a result of calculating the moving average of a security’s price over a period of time. Visually, the Donchian Channel will have three lines.
Indices
Indices are a collection of financial instruments that measure the performance of those very instruments.
For example, stock market indices like Nifty 50 and Sensex measure the top 50 and 30 stocks by market capitalization.
If indices go up, it generally means that the underlying stocks are performing well. The opposite is true when indices plummet.
By the way, there’s no limit to how many instruments an index can track. The Nifty Smallcap 250 tracks 250 stocks whereas Nifty Bank tracks 12 stocks.
For example, stock market indices like Nifty 50 and Sensex measure the top 50 and 30 stocks by market capitalization.
If indices go up, it generally means that the underlying stocks are performing well. The opposite is true when indices plummet.
By the way, there’s no limit to how many instruments an index can track. The Nifty Smallcap 250 tracks 250 stocks whereas Nifty Bank tracks 12 stocks.
Portfolio
A Portfolio is a collection or grouping of financial assets of an investor. A portfolio can have a diversified mix of assets such as equity shares, mutual fund units, government bonds, fixed deposits, gold, and real estate. The aim of building a portfolio is to manage the risk by diversification, ensuring that the poor performance of one asset is compensated for by the high performance of another. Portfolio management is one of the most important elements of financial planning for an investor.
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