As of 07/10/2020
  Indus: 26,075 +369.21 +1.4%  
  Trans: 9,312 +172.05 +1.9%  
  Utils: 791 +17.12 +2.2%  
  Nasdaq: 10,617 +69.69 +0.7%  
  S&P 500: 3,185 +32.99 +1.0%  
YTD
-8.6%  
-14.6%  
-10.0%  
 +18.3%  
-1.4%  
  Targets    Overview: 06/30/2020  
  Down arrow24,000 or 27,800 by 07/15/2020
  Down arrow8,400 or 10,000 by 07/15/2020
  Up arrow825 or 700 by 07/15/2020
  Up arrow10,800 or 10,000 by 08/01/2020
  Down arrow2,900 or 3,300 by 07/15/2020
CPI (updated daily): Arrows on 7/10/20
As of 07/10/2020
  Indus: 26,075 +369.21 +1.4%  
  Trans: 9,312 +172.05 +1.9%  
  Utils: 791 +17.12 +2.2%  
  Nasdaq: 10,617 +69.69 +0.7%  
  S&P 500: 3,185 +32.99 +1.0%  
YTD
-8.6%  
-14.6%  
-10.0%  
 +18.3%  
-1.4%  
  Targets    Overview: 06/30/2020  
  Down arrow24,000 or 27,800 by 07/15/2020
  Down arrow8,400 or 10,000 by 07/15/2020
  Up arrow825 or 700 by 07/15/2020
  Up arrow10,800 or 10,000 by 08/01/2020
  Down arrow2,900 or 3,300 by 07/15/2020
CPI (updated daily): Arrows on 7/10/20

Bulkowski on the Bullish Crab®

 

Initial release: 8/9/2018. Statistics updated on 4/6/20.

Overview

This article describes my analysis of the bullish crab 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 crab can resemble a double top 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.

The breakout direction is downward 68% of the time, so the pattern is bearish, not bullish.

The crab pattern
Bullish Crab

 

Bullish Crab: Important Bull Market Results

Overall performance rank for up/down breakouts (1 is best): 32 out of 48/18 out of 46
Break even failure rate (up/down breakouts): 11%/22%
Average rise/decline: 40%/15%
Throwback/pullback rate: 54%/66%
Percentage meeting price target (up/down breakouts): *54%/*12%

The above numbers are based on over 500 perfect trades with upward or downward breakouts in a bull market. See the glossary for definitions.

* I used the height of the pattern to determine a target after a breakout.

Top of page

Bullish Crab: Identification Guidelines

Because of the many ratios used, the pattern is rare. I found 500+ of them since 1990, but some of those were from a bear market. The statistics in this article only apply to bull markets.

You'll need a computer with software to find the pattern.

Find five peaks/valleys where the ratio of one leg to another is one of the Fibonacci numbers listed in the figure. However, I used a 3 percentage point window on the last ratio to keep the sample count high.

 Characteristic Discussion crab retraces
Bullish Crab 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 retrace value is shown in the figure
ABCTurn ABC shows a CB/AB retrace of one of the following Fibonacci ratios shown.
BCDExtension CD/CB is one of three Fibonacci ratios.
XADRetrace AD/AX is 161.8%.

Top of page

Bullish Crab: Trading Tips

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

My tests show that the pattern breaks out downward 68% of the time. What does that mean? A close below the bottom of the pattern means a downward breakout. So price has to drop from the low at D and close below it. An upward breakout means a close above the top of the pattern (A).

Price may rise after point D, and that happens 69% of the time. The average rise above D is 39%.

You may have better luck with the pattern if underlying support is near the XD valleys.

Bullish Crab: Example

An example crab pattern

The figure above shows an example of a bullish crab pattern, XABCD.

Here are the high/low prices of the various turns

X: 39.65 - 38.65
A: 41.90 - 41.32
B: 40.23 - 39.60
C: 41.36 - 40.89
D: 38.95 - 36.62

Here are the ratios.

AB/AX = (41.90-39.60)/(41.90-38.65) or 70.7%, using the low at B. Using the high at B, we get: (41.9-40.23)/(41.9-38.65) or 51%. The high-low range encompasses the 61.8% retrace, so I allow it.

CB/AB = (41.36-39.60)/(41.90-39.60) or 76.5%, using the high at C. The low at C gives (40.89-39.60)/(41.90-39.60) or 56%, which encompasses the 70.7% retrace, so I allow this.

CD/CB = (41.36-36.62)/(41.36-39.60) or 269.3%. However, the high-low range of D (41.36-38.95)/(41.36-39.60) or 136.9% encompasses the 261.8% retrace, so it's allowed.

AD/AX = (41.90-36.62)/(41.90-38.65) or 162.5% which is within three percentage points of 161.8%, so it's allowed.

This bullish crab is one of the few that breakout upward. Notice that price has to rise from D to close above A to stage an upward breakout. That's why upward breakouts only happen about a third of the time.

Price breaks out upward at E and throws back to the breakout price and keeps dropping, to F before recovering slightly. Recently, the stock has been below the breakout price, as the chart shows.

-- Thomas Bulkowski

Top of page

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

Copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved.
Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.
Some pattern names are registered trademarks of their respective owners.

Home Advertise Contact Donate Links Privacy/Disclaimer

crab is a registered trademark of Scott Carney.

If it jams, force it. If it breaks, it needed replacing anyway.Smiley