The Red Pennant is a non-solid block which can be used as a decoration. It appears as a red animated flag connected to a pole. There are 3 other variations of pennants: Yellow Pennant, Blue Pennant and a Green Pennant.
It can be obtained by winning the Growganoth Gulch (Left) in The Carnival. It is a 'Common Prize', which means that it is the easiest prize to obtain in that game.