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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Industrials (^DJI):
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As of 08/29/2014
17,098 18.88 0.1%
8,408 2.64 0.0%
564 4.26 0.8%
4,580 22.58 0.5%
2,003 6.63 0.3%
YTD
3.1%
13.6%
15.0%
9.7%
8.4%
Tom's Targets    Overview: 08/14/2014
17,300 or 16,700 by 09/15/2014
8,700 or 8,000 by 09/01/2014
575 or 540 by 09/15/2014
4,600 or 4,300 by 09/01/2014
2,050 or 1,950 by 09/15/2014

Written and copyright © 2014 by Thomas N. Bulkowski. All rights reserved.

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Friday 8/29/14. Pattern Trading Setups for the Weekend.

Go to Table.

You can find setups based on a Fibonacci retrace by clicking on the link.

Click the link for a list of symbols from the table.

The following patterns were found manually, so the results may differ from those found using Patternz.

There were 13 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 603 stocks searched, or 2.2%. Based on the percentage, the stock market is trending since few consolidation patterns appear.

Excluding ETFs, there were 7 bullish chart patterns this week and 2 bearish ones with any remaining (3) being undecided. The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

The following tips may help.

  • Look for patterns with unusual breakout directions, such as an ascending triangle with a downward breakout. The unusual breakout direction can suggest a strong run.
  • Busted patterns, where price breaks out in one direction, turns around and then breaks out in the opposite direction can lead to powerful moves.
  • Throwbacks and pullbacks occur about half the time, so be prepared for a retrace after the breakout.
  • Look for underlying support and overhead resistance to help gauge how far price will move after the breakout.

More...

Good luck. -- Thomas Bulkowski

 

Symbol Chart Pattern Bullish
Bearish
Start End Industry
ACETBroadening bottom      05/27/201408/25/2014Chemical (Diversified)
BMITriangle, symmetrical      07/01/201408/27/2014Precision Instrument
BIODiamond top      08/07/201408/28/2014Medical Supplies
COGTriangle, symmetrical      08/01/201408/28/2014Natural Gas (Diversified)
CONNScallop, descending      07/03/201408/26/2014Retail (Special Lines)
CEBFlag      08/20/201408/28/2014Information Services
BOOMBroadening bottom      08/04/201408/26/2014Metal Fabricating
FOERectangle top      04/11/201408/28/2014Chemical (Specialty)
LAMRRising wedge      08/04/201408/28/2014Advertising
LAWSTriangle, descending      08/01/201408/25/2014Metal Fabricating
KWRBroadening bottom      05/02/201408/28/2014Chemical (Specialty)
WATTriangle, symmetrical      07/30/201408/27/2014Precision Instrument
PPABroadening top, right-angled and descending      06/25/201408/28/2014Aerospace/Defense

 

Weekly screen for chart patterns ending between 08/21/2014 and 08/28/2014. Many may be still in development. If no securities appear, then I have not identified any new patterns.

Definitions
RS is relative strength (where 1 is best). For other definitions, see the glossary.
’Breakout is upward/downward 100% of the time’ means price breaks out up/down by definition, not by statistically measuring the rate.
All numbers assume a bull market and are based on the breakout direction that occurs most often.
For more information, consult my book, Encyclopedia of Chart Patterns, Second Edition.
 
Aceto Corp (ACET)
Industry: Chemical (Diversified)
Industry RS rank: 26 out of 53
Stock RS rank: 320 out of 595
Close as of 08/28/2014: $18.86
1 Month average volatility: $0.39. Volatility based stop (assuming upward breakout): $18.07 or 4.2% below the close.
Change YTD: -24.59%
Volume: 113,100 shares
3 month avg volume: 195,651 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Broadening bottom reversal pattern from 05/27/2014 to 08/25/2014
Performance rank: 17 out of 23.
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price meets the measure rule target 59% of the time.

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Badger Meter Inc. (BMI)
Industry: Precision Instrument
Industry RS rank: 42 out of 53
Stock RS rank: 454 out of 595
Close as of 08/28/2014: $51.23
1 Month average volatility: $0.95. Volatility based stop (assuming upward breakout): $49.25 or 3.9% below the close.
Change YTD: -6.00%
Volume: 12,400 shares
3 month avg volume: 38,152 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 07/01/2014 to 08/27/2014
Performance rank: 16 out of 23.
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price meets the measure rule target 66% of the time.

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Bio-Rad Laboratories (BIO)
Industry: Medical Supplies
Industry RS rank: 36 out of 53
Stock RS rank: 503 out of 595
Close as of 08/28/2014: $120.07
1 Month average volatility: $1.86. Volatility based stop (assuming downward breakout): $125.21 or 4.3% above the close.
Change YTD: -2.86%
Volume: 23,200 shares
3 month avg volume: 68,518 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Diamond top reversal pattern from 08/07/2014 to 08/28/2014
Performance rank: 7 out of 21.
Breakout is downward 69% of the time.
Average decline: 21%.
Break-even failure rate: 6%.
Pullbacks occur 57% of the time.
Price meets the measure rule target 76% of the time.

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Cabot Oil and Gas A (COG)
Industry: Natural Gas (Diversified)
Industry RS rank: 21 out of 53
Stock RS rank: 465 out of 595
Close as of 08/28/2014: $33.37
1 Month average volatility: $0.70. Volatility based stop (assuming upward breakout): $31.41 or 5.9% below the close.
Change YTD: -13.91%
Volume: 2,971,900 shares
3 month avg volume: 4,967,477 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 08/01/2014 to 08/28/2014
Performance rank: 16 out of 23.
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price meets the measure rule target 66% of the time.

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Conns Inc (CONN)
Industry: Retail (Special Lines)
WARNING: This industry is within the top 7 that Dead-cat bounce often.
Industry RS rank: 9 out of 53
Stock RS rank: 43 out of 595
Close as of 08/28/2014: $44.73
1 Month average volatility: $1.52. Volatility based stop (assuming downward breakout): $49.01 or 9.6% above the close.
Change YTD: -43.16%
Volume: 554,200 shares
3 month avg volume: 726,482 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Scallop, descending continuation pattern from 07/03/2014 to 08/26/2014
Performance rank: 16 out of 21.
Breakout is downward 66% of the time.
Average decline: 17%.
Break-even failure rate: 15%.
Pullbacks occur 55% of the time.
Price meets the measure rule target 30% of the time.

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Corporate Executie Board Co (CEB)
Industry: Information Services
Industry RS rank: 44 out of 53
Stock RS rank: 518 out of 595
Close as of 08/28/2014: $65.10
1 Month average volatility: $1.32. Volatility based stop (assuming upward breakout): $62.40 or 4.1% below the close.
Change YTD: -15.92%
Volume: 187,700 shares
3 month avg volume: 182,206 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Friday, and the most up closes (best sell day) is Tuesday.
 
Chart pattern: Flag continuation pattern from 08/20/2014 to 08/28/2014
Breakout is upward 54% of the time.
Average rise: 23%.
Break-even failure rate: 4%.
Throwbacks occur 43% of the time.
Price meets the measure rule target 64% of the time.

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Dynamic Materials (BOOM)
Industry: Metal Fabricating
Industry RS rank: 47 out of 53
Stock RS rank: 473 out of 595
Close as of 08/28/2014: $19.90
1 Month average volatility: $0.57. Volatility based stop (assuming upward breakout): $18.40 or 7.5% below the close.
Change YTD: -8.46%
Volume: 39,300 shares
3 month avg volume: 38,245 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Broadening bottom reversal pattern from 08/04/2014 to 08/26/2014
Performance rank: 17 out of 23.
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price meets the measure rule target 59% of the time.

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Ferro Corp (FOE)
Industry: Chemical (Specialty)
Industry RS rank: 22 out of 53
Stock RS rank: 323 out of 595
Close as of 08/28/2014: $13.47
1 Month average volatility: $0.33. Volatility based stop (assuming upward breakout): $12.70 or 5.7% below the close.
Change YTD: 4.99%
Volume: 159,300 shares
3 month avg volume: 667,329 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Friday.
 
Chart pattern: Rectangle top continuation pattern from 04/11/2014 to 08/28/2014
Performance rank: 12 out of 23.
Breakout is upward 68% of the time.
Average rise: 39%.
Break-even failure rate: 9%.
Throwbacks occur 64% of the time.
Price meets the measure rule target 80% of the time.

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Lamar Advertising (LAMR)
Industry: Advertising
Industry RS rank: 38 out of 53
Stock RS rank: 289 out of 595
Close as of 08/28/2014: $52.20
1 Month average volatility: $0.57. Volatility based stop (assuming downward breakout): $53.53 or 2.6% above the close.
Change YTD: -0.10%
Volume: 460,700 shares
3 month avg volume: 1,213,565 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Rising wedge reversal pattern from 08/04/2014 to 08/28/2014
Performance rank: 20 out of 21.
Breakout is downward 69% of the time.
Average decline: 14%.
Break-even failure rate: 24%.
Pullbacks occur 63% of the time.
Price meets the measure rule target 46% of the time.

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Lawson Products (LAWS)
Industry: Metal Fabricating
Industry RS rank: 47 out of 53
Stock RS rank: 38 out of 595
Close as of 08/28/2014: $17.89
1 Month average volatility: $0.66. Volatility based stop (assuming downward breakout): $19.89 or 11.2% above the close.
Change YTD: 46.04%
Volume: 12,400 shares
3 month avg volume: 13,386 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Wednesday.
 
Chart pattern: Triangle, descending reversal pattern from 08/01/2014 to 08/25/2014
Performance rank: 10 out of 21.
Breakout is downward 64% of the time.
Average decline: 16%.
Break-even failure rate: 16%.
Pullbacks occur 54% of the time.
Price meets the measure rule target 54% of the time.

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Quaker Chemical (KWR)
Industry: Chemical (Specialty)
Industry RS rank: 22 out of 53
Stock RS rank: 207 out of 595
Close as of 08/28/2014: $77.93
1 Month average volatility: $1.44. Volatility based stop (assuming upward breakout): $74.21 or 4.8% below the close.
Change YTD: 1.12%
Volume: 52,600 shares
3 month avg volume: 53,252 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Monday.
 
Chart pattern: Broadening bottom reversal pattern from 05/02/2014 to 08/28/2014
Performance rank: 17 out of 23.
Breakout is upward 53% of the time.
Average rise: 27%.
Break-even failure rate: 10%.
Throwbacks occur 41% of the time.
Price meets the measure rule target 59% of the time.

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Waters Corp (WAT)
Industry: Precision Instrument
Industry RS rank: 42 out of 53
Stock RS rank: 485 out of 595
Close as of 08/28/2014: $103.36
1 Month average volatility: $1.35. Volatility based stop (assuming upward breakout): $99.83 or 3.4% below the close.
Change YTD: 3.36%
Volume: 228,300 shares
3 month avg volume: 463,606 shares
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Wednesday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Triangle, symmetrical continuation pattern from 07/30/2014 to 08/27/2014
Performance rank: 16 out of 23.
Breakout is upward 54% of the time.
Average rise: 31%.
Break-even failure rate: 9%.
Throwbacks occur 37% of the time.
Price meets the measure rule target 66% of the time.

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PowerShares Aerospace and Defense (PPA)
Industry: Aerospace/Defense
Industry RS rank: 33 out of 53
Stock RS rank: 360 out of 595
Close as of 08/28/2014: $32.57
1 Month average volatility: $0.29. Volatility based stop (assuming upward breakout): $31.92 or 2.0% below the close.
Change YTD: 4.96%
Volume: 10,900 shares
3 month avg volume: 34,068 shares
Based on the avg volume, this security may be thinly traded (less than 100,000 shares)!
Based on up closes since the 2009 bear market ended, the day with fewest up closes (best buy day) is Monday, and the most up closes (best sell day) is Thursday.
 
Chart pattern: Broadening top, right-angled and descending continuation pattern from 06/25/2014 to 08/28/2014
Performance rank: 23 out of 23.
Breakout is upward 51% of the time.
Average rise: 28%.
Break-even failure rate: 19%.
Throwbacks occur 52% of the time.
Price meets the measure rule target 63% of the time.

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Thursday 8/28/14. Intraday Market Direction: Nasdaq

The index dropped by 0.0% or -1.02 points. Since 02/05/1971 the index made 591 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.8% on 330 occasions.
     Average loss was -1.0% on 261 occasions.
Expect the index to close higher 55.8% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 67/117 or 57.3% of the time.
     The prediction of the index closing lower has been right 25/50 or 50.0% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

Picture of the Nasdaq composite on the 5 minute scale.

$ $ $

I show a picture of the Nasdaq composite on the 5-minute scale.

The two red lines show a chart pattern called a rectangle top. A rectangle top has price enter the chart pattern from below and then price bounces from trendline to trendline until eventually breaking out. The breakout direction is unknown until it happens but the breakout is upward 68% of the time.

Look at the two blue lines. That is another rectangle top. I find it very helpful to use prior chart patterns as indicators of how a similar chart pattern will behave. The blue one has an upward breakout.

While I think the market is weakening, it could break out upward from the rectangle and do it tomorrow (Thursday). Since the probabilities suggest a higher close, then I guess I'll vote for an upward breakout, too.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Nasdaq composite, sorted by value. When several are near each other (small differences), the area might act as support or resistance.

-- Thomas Bulkowski

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© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  4,254.23    
 Monthly S1  4,411.93  157.69   
 Weekly S2  4,473.63  61.71   
 Monthly Pivot  4,479.58  5.95   
 Weekly S1  4,521.63  42.04   
 Weekly Pivot  4,534.43  12.81   
 Daily S2  4,555.11  20.67   
 Low  4,561.83  6.72   
 Daily S1  4,562.36  0.53   Yes! The Daily S1 is close to the Low.
 61.8% Down from Intraday High  4,567.17  4.81   
 50% Down from Intraday High  4,568.82  1.65   
 Daily Pivot  4,569.09  0.27   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  4,569.62  0.53   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  4,570.47  0.85   Yes! The 38.2% Down from Intraday High is close to the Close.
 Open  4,574.35  3.88   
 High  4,575.81  1.46   
 Daily R1  4,576.34  0.53   Yes! The Daily R1 is close to the High.
 Weekly R1  4,582.43  6.08   
 Daily R2  4,583.07  0.64   Yes! The Daily R2 is close to the Weekly R1.
 Weekly R2  4,595.23  12.17   
 Monthly R1  4,637.28  42.04   
 Monthly R2  4,704.93  67.66   

Wednesday 8/27/14. Market Direction: CPI

Picture of the chart pattern indicator

This is a picture of the chart pattern indicator on the daily scale. The indicator is the line chart below a chart of the S&P 500 composite.

I circled in red what could turn into a failure swing in the indicator. In short, it suggests a change in momentum from up to down and a probable decline in the index. Compare the blue circle to the red one. The index is moving up even as the CPI is turning down.

It's a form of (bearish) divergence.

A similar pattern of an uptrend in the index accompanied a declining CPI appears circled in green. The index moved sideways to down going into April (cyan line). That scenario could play out now.

Picture of the chart pattern indicator

This is the CPI with the signal changes shown. I'm looking for the most recent green bars to change to clear or even red. That hasn't happened yet. It suggests the upward move is intact and with world events calming down (Ukraine, Gaza), we could have a longer bullish run. Just be aware that the index will pause to retrace some. When that will happen is anyone's guess.

$ $ $

I spent this past weekend working on the entryway to my house. The entryway is not the front entrance but a wooden structure that will span the sidewalk leading to my front door (it's hard to describe). When I'm done, I'll post pix on Facebook. The hope is that it'll prevent cats from getting onto my property (as well as look nice). The cats use the sidewalk to get to my front and back yards where the birds have their own nature preserve.

-- Thomas Bulkowski

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Tuesday 8/26/14. Intraday Market Direction: Dow

The index climbed by 0.4% or 75.65 points. Since 10/01/1928 the index made 1030 similar moves on a percentage basis. After those moves, the next day's...
     Average gain was 0.6% on 542 occasions.
     Average loss was -0.6% on 488 occasions.
Expect the index to close higher 52.6% of the time.
Weekly, since inception on 6/14/2011:
     The prediction of the index closing higher has been right 79/123 or 64.2% of the time.
     The prediction of the index closing lower has been right 21/39 or 53.8% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

Picture of the Dow industrials on the 5 minute scale.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale.

I don't see much to clue me into how the Dow will do tomorrow or in the coming days.

Today (Monday) was like a rest period. The index moved horizontally, resting on support (A) for a good portion of the day. If the index decides to tumble, it might find support at the lower edge of the range I show as the blue line, B. That would means a tumble of 100 points. In fact, since the index has been rising for seven days now (moving horizontally for the last three), it is time for the index to retrace some.

So for Tuesday, I'm looking for the index to retrace a portion of the gains. It might be a day in which the Dow loses 100 points. That's my target: 17,000. But be aware that the index could rise just as easily, spurting ahead as it comes out of its three-day rest period. The above probabilities show a higher close.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Dow industrials, sorted by value. When several are near each other (small differences), the area might act as support or resistance.

-- Thomas Bulkowski

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© 2014 ThePatternSite.com    Metric  Value  Diff  Close (within 10% of the high-low range for the day)? 
 Monthly S2  16,048.38    
 Weekly S2  16,528.50  480.12   
 Monthly S1  16,562.62  34.13   
 Weekly S1  16,802.68  240.06   
 Monthly Pivot  16,848.03  45.34   
 Weekly Pivot  16,938.64  90.61   
 Daily S2  16,958.21  19.57   
 Low  17,011.81  53.60   
 Open  17,011.81  0.00   Yes! The Open is close to the Low.
 Daily S1  17,017.54  5.73   Yes! The Daily S1 is close to the Open.
 61.8% Down from Intraday High  17,054.95  37.41   
 50% Down from Intraday High  17,068.28  13.33   
 Daily Pivot  17,071.14  2.87   Yes! The Daily Pivot is close to the 50% Down from Intraday High.
 Close  17,076.87  5.73   Yes! The Close is close to the Daily Pivot.
 38.2% Down from Intraday High  17,081.60  4.73   Yes! The 38.2% Down from Intraday High is close to the Close.
 High  17,124.74  43.14   
 Daily R1  17,130.47  5.73   Yes! The Daily R1 is close to the High.
 Daily R2  17,184.07  53.60   
 Weekly R1  17,212.82  28.75   
 Weekly R2  17,348.78  135.95   
 Monthly R1  17,362.27  13.50   
 Monthly R2  17,647.68  285.40   

Written and copyright © 2014 by Thomas N. Bulkowski. All rights reserved.