Taken from http://www.investopedia.com/university/charts/charts6.asp
are formed when there is a sharp price movement followed by generally sideways price movement, which is the . The pattern is complete when there is a price breakout in the same direction of the initial sharp price movement. The following move will see a similarly sharp move in the same direction as the prior sharp move.
expanded on the sharp advance to form the , contracted during the pennant's formation. Expectation that it will expand right after the resistance breakout ... which looks to nicely coincide with the golden cross (an especially strong signal when the 50 day moving average crosses above the 200 day moving average.)
Based on Bulkowski's the measure rule (http://thepatternsite.com/pennants.html) ... the price breakout price can be as into the 2.50's.
This is a further refinement of a previous idea lined to in Related Ideas.