Another Strange Bullish Pennant

Although my previous pennant trade has not ended yet, I would not call it a success. That pattern was not a classical instance of a bullish pennant. Neither is today’s CHF/JPY formation on daily chart. The pennant’s pole is not too high compared to the previous price action, while the “flag” part is too long — almost two months. Nevertheless, I would qualify it is a valid potential bullish entry trigger.
The entry level (cyan line) was generated by adding 10% of the pole’s height to the pattern’s upper border (yellow line). The target level (green line) is 100% of the pole’s height added to that same border. I will set my stop-loss level to the breakout bar’s low or to the low of the preceding bar if the breakout bar will trade mostly outside the pennant. I will not enter a bearish breakout trade with this set-up as it is clearly a bullish continuation pattern. You can click on the image below for a full-sized chart screenshot:

You can download my MetaTrader 4 chart template for this CHF/JPY pattern. It can be traded using my free Chart Pattern Helper EA.
Update 2013-06-07 14:11 GMT: I have cancelled the pending order for this trade setup as the recent volatile price action has invalidated the pattern.

If you have any questions or comments regarding this bullish pennant on CHF/JPY chart, please feel free to submit them via the form below.

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