Here's an example of a stock forming a bearish pennant immediately after breaking a longer term support trendline. This happen often as the stock is still generally in an uptrend when the first break occurs and some amateur traders recognize what they think is a buying opportunity. But the pros are unloading and when buying from the public dries up, the bottom falls out.

Here's is another example of a stock trading into a bearish pennant soon after a longer term uptrend was broken. Notice volume on the initial break was simply average, but the next day was a blood bath. This happens often…a delayed volume surge.

MCD traded into a bearish pennant while in a downtrend. The trendlines are easy to draw which is a bonus. Notice how volume ramped up after the break and stockholders didn't throw in the towel until well after the stock broke support.



PXLW is another example of how volume typically ramps up after a stock breaks down.


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