As of 06/14/2019
  Industrials: 26,090 -17.16 -0.1%  
  Transports: 10,305 -42.06 -0.4%  
  Utilities: 816 +7.97 +1.0%  
  Nasdaq: 7,797 -40.47 -0.5%  
  S&P 500: 2,887 -4.66 -0.2%  
YTD
 +11.8%  
 +12.4%  
 +14.4%  
 +17.5%  
 +15.2%  
  Tom's Targets    Overview: 06/13/2019  
  Up arrow26,800 or 25,400 by 07/01/2019
  Up arrow10,700 or 9,900 by 07/01/2019
  Up arrow830 or 780 by 07/01/2019
  Up arrow8,150 or 7,575 by 07/01/2019
  Up arrow2,950 or 2,800 by 07/01/2019
As of 06/14/2019
  Industrials: 26,090 -17.16 -0.1%  
  Transports: 10,305 -42.06 -0.4%  
  Utilities: 816 +7.97 +1.0%  
  Nasdaq: 7,797 -40.47 -0.5%  
  S&P 500: 2,887 -4.66 -0.2%  
YTD
 +11.8%  
 +12.4%  
 +14.4%  
 +17.5%  
 +15.2%  
  Tom's Targets    Overview: 06/13/2019  
  Up arrow26,800 or 25,400 by 07/01/2019
  Up arrow10,700 or 9,900 by 07/01/2019
  Up arrow830 or 780 by 07/01/2019
  Up arrow8,150 or 7,575 by 07/01/2019
  Up arrow2,950 or 2,800 by 07/01/2019

Bulkowski's 2B Pattern

 

If you have been around chart patterns long enough or are widely read in the subject, you may have heard of the 2B pattern. It is less a pattern than it is a way for swing traders to take profits.

However, my book, Fundamental Analysis and Position TradingFundamental Analysis and Position Trading: Evolution of a Trader book., pictured on the right, spends a few pages on the topic that you might find useful.

If you click on this link and then buy the book (or anything) at Amazon.com, the referral will help support this site. Thanks. -- Tom Bulkowski

 


Updated to site format: 3/16/19.

Enter Trader Vic and 2B Pattern

Victor Sperandeo in his book, Trader Vic--Methods of a Wall Street Master describes the 2B pattern this way.

In an uptrend, if a higher high is made but fails to carry through, and then prices drop below the previous high, then the trend is apt to reverse. The converse is true for down trends. This observation applies in any of the three trends; short-term, intermediate-term, or long-term.

A 2B on a minor high or low will usually occur within one day or less of the time the high or low is made. For 2B's on intermediate highs or lows preceding a correction, the new high or low point will usually break within three to five days. At major market turning points, long-term 2B's, the new high or low will usually break within seven to ten days. In the stock market, after the new high is made, the failure to carry forward usually occurs on low to normal volume, and the confirmation of a reversal occurs on higher volume.

I prefer to think of a 2B as one in which price begins to form a double top. It may not confirm as a double top (meaning that price may not close below the price of the valley between the two peaks) but price exceeds the level of the first top and then reverses.

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A chart of Omnicom group (OMC) on the daily scale.

A 2B Pattern Example

Let's look at a chart example. I show Omnicom Group (OMC) in late 2016 on the daily scale. Price rises in a strong upward trend (red line A) to peak B.

The stock retraces a good portion of the move up (that is, it drops and forms the valley between peaks BC).

Price rises again and forms peak C. The horizontal blue line shows that the stock has risen above the prior peak (B) to make a new high at C.

Then the stock drops to D (so far), leaving behind another peak (C).

Peak C is a 2B pattern.

-- Thomas Bulkowski

See Also

 
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Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.
Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns Bumper's Story Head's Law
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