As of 09/18/2020
  Indus: 27,657 -244.56 -0.9%  
  Trans: 11,432 -120.44 -1.0%  
  Utils: 798 -12.86 -1.6%  
  Nasdaq: 10,793 -117.00 -1.1%  
  S&P 500: 3,319 -37.54 -1.1%  
YTD
-3.1%  
 +4.9%  
-9.2%  
 +20.3%  
 +2.7%  
  Targets    Overview: 09/14/2020  
  Up arrow29,400 or 26,700 by 10/01/2020
  Up arrow11,750 or 10,600 by 10/01/2020
  Up arrow845 or 775 by 10/01/2020
  Up arrow11,800 or 10,400 by 10/01/2020
  Up arrow3,600 or 3,200 by 10/01/2020
CPI (updated daily): Arrows on 8/18/20
As of 09/18/2020
  Indus: 27,657 -244.56 -0.9%  
  Trans: 11,432 -120.44 -1.0%  
  Utils: 798 -12.86 -1.6%  
  Nasdaq: 10,793 -117.00 -1.1%  
  S&P 500: 3,319 -37.54 -1.1%  
YTD
-3.1%  
 +4.9%  
-9.2%  
 +20.3%  
 +2.7%  
  Targets    Overview: 09/14/2020  
  Up arrow29,400 or 26,700 by 10/01/2020
  Up arrow11,750 or 10,600 by 10/01/2020
  Up arrow845 or 775 by 10/01/2020
  Up arrow11,800 or 10,400 by 10/01/2020
  Up arrow3,600 or 3,200 by 10/01/2020
CPI (updated daily): Arrows on 8/18/20

Bulkowski on the Bullish Bat®

 

Initial release: 6/28/2018. Statistics updated 8/28/2020.

Overview

This article describes my analysis of the bullish bat pattern as described by publicly available information and common sense rules to determine valid patterns. Additional rules may or may not improve performance. I tested the pattern using only the below identification guidelines.

The bullish bat often resembles a big M chart pattern except that the turns are located using Fibonacci ratios. It's very rare, and you'll need a computer with pattern recognition software to fine it.

Once price reaches the bottom of the pattern at point D, it reverses 91% of the time.

The bat pattern
Bullish Bat

Important Bull Market Results

Overall performance rank for upward moves: 1 (best) out of 5 (versus other Fibonacci patterns only)
Break even failure rate: 10%
Average rise: 44%
Percentage reversing at point D: 91%

The above numbers are based on 259 perfect trades. See the glossary for definitions.

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Identification Guidelines

 Characteristic Discussion bat retraces
Bullish Bat Ratios
Peaks/ValleysThe peaks and valleys in the pattern need not be consecutive. This is not a guideline, but an observation.
XABPrice drops to valley X, the first point in the pattern. It rises from there to A and retraces to B. The AB/AX retrace should be either 38.2% or 50%.
ABCTurn ABC shows a CB/AB retrace of one of the following Fibonacci ratios: 38.2%, 50%, 61.8%, 70.7%, 78.6% or 88.6%.
BCDExtension CD/CB is one of the following Fibonacci ratios: 161.8%, 200%, 224% or 261.8%.
XADRetrace AD/AX is 88.6%.

Find five peaks/valleys where the ratio of one leg to another is one of the Fibonacci numbers listed in the above table. However, I used a 3 percentage point window on the last ratio (88.6% becomes 85.6% to 91.6%) to keep the sample count high.

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Trading Tips

I don't offer much trading help because I'm new to this pattern.

My tests of this pattern revealed that the turn rate at point D is 91%.

Price rises to C 64% of the time, to B 86% of the time, and to A 58% of the time.

Example

An example bat pattern

The figure on the right shows an example of a bullish bat pattern, XABCD.

Here are the high/low prices of the various turns

X: 16.60
A: 21.36
B: 19.36
C: 20.85
D: 17.22

Here are the ratios.

AB/AX = (21.36-19.36)/(21.36-16.60) or 42.0%. However the high-low range of B (20.26-19.36) encompasses the 38.2% retrace, so I allow it.

CB/AB = (20.85-19.36)/(21.36-19.36) or 74.5%. However the high-low range of C (20.85 to 20.50) encompasses the 70.7% retrace, so I allow this.

CD/CB = (20.85-17.22)/(20.85-19.36) or 243.6%. However, the high-low range of D (18.66 to 17.22) encompasses the 161% retrace, so it's allowed.

AD/AX = (21.36-17.22)/(21.36-16.60) or 87.0% which is within three percentage points of 88.6%, so it's allowed.

After price makes a higher low at D (compared to X), the stock recovers. It closes above A and stages an upward breakout. The ultimate high is 22.00. From the low at D, the rise measures (22-17.22)/17.22 or 28%. That's a nice gain providing you buy at the low at D and sell at the ultimate high at 22.

-- Thomas Bulkowski

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See Also

 

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.

My novels:  Bumper's Story Head's Law

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

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