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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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Bulkowski's Diving Board

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My book, Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the left, does not cover the diving board but it has 63 other chart and event patterns.

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Updated 2/13/2018

I discovered the diving board chart pattern on November 25, 2010 -- Thanksgiving day -- when I went shopping for stocks to buy. I noticed that price formed a flat base (the diving board) and then plunged downward (diving into the water) followed by a straight-line run up (returning to the surface and climbing out of the water). The flat base and downward plunge reminded me of jumping off a diving board, hence the pattern's name.

I found 865 diving board patterns using the weekly charts in 534 stocks from May 1990 to November 2017. It's somewhat rare but plentiful enough to find during a diligent search. A spot check of the pattern reveals that it also appears on the daily charts, but I didn't study those. The discussion below pertains to diving boards on the weekly scale.

The ideal diving board chart pattern, in the graphic below, shows the shape of the pattern.

The ideal diving board chart pattern
Ideal Diving Board Pattern

Important Bull Market Results for the Diving Board

Overall performance rank (1 is best): Not available yet
Break even failure rate: 6%
Average rise: 67%

The above numbers are based on hundreds of perfect trades in a bull market. See the glossary for definitions.

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Diving Board Identification Guidelines

CharacteristicDiscussion
Weekly scaleUse the weekly price chart to find this pattern.
Price trendI removed most diving boards which appeared in downward trends. I prefer to find them in flat or upward trends.
Diving boardLook for price to have a flat bottom, not top (the top can be any shape, but a flat bottom is critical). This is the diving board.
PlungePrice makes a straight-line run down or nearly so (see Plunge in the figure below). This is the plunge into the water.
RecoveryAfter the sharp drop, price recovers, sometimes in a straight-line run upward. This is the move from the bottom of the pond back onto shore.

Picture of a diving board.

Look for the diving board chart pattern on the weekly scale. That's the scale I was using when I noticed it, so you can find it on the daily and other charts but performance will vary.

Price should make a flat base. In other words, the bottoms of price should line up with few outliers plunging through the bottom. I prefer a tight congestion region that's horizontal, but allow variations. I counted a few patterns with slanting bases (forming symmetrical triangles). A horizontal congestion region seemed to give the best performance. The flat base averaged 322 days long or about 10 months, with a median of 246 days (about 8 months).

After the flat base, look for a price plunge. I prefer a straight-line drop down, not one that meandered lower and had lots of consolidation regions. I wanted the decline to be a serious one, one that shakes bulls to the core.

The drop from the base of the pattern until the price trend reversed averaged 18%. The median drop was 14%.

Once price reverses at the bottom of its plunge, it rises often in a straight-line move up (but not always). I found that 88% climbed far enough to at least reach the bottom of the diving board before encountering a trend change (a drop of at least 20%). Twenty-five percent stopped rising within the diving board (top of pattern to bottom of the board, not the plunge). Fully 63% continued rising above the top of the pattern.

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Diving Board Trading Tips

The median diving board length was 246 days. Those with boards narrower than 246 days showed gains averaging 62% versus those with longer boards and gains of 74%. Wider diving boards outperform, but the median rise is much smaller, 40% (narrow boards) versus 41% (wide ones).

Trading TacticExplanation
Diving board lengthLonger is better.
Ride itPrice returns to the diving board bottom 88% of the time before changing trend
Buy signalWhen price closes above the top of the chart pattern, buy. The gain from there to the ultimate high averages 67% (40% median).

If you can determine when the plunge has ended, such as using a down-sloping trendline, then that could get you into the trade early.

Hold onto the trade as long as the upward trend continues. As a benchmark, I used a trend change to signal the end of a trend. That means price turned down at least 20% after peaking. Measuring the climb from the plunge low to that peak showed that 88% of the patterns had price reaching or exceeding the bottom of the diving board.

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A diving board chart pattern example

Diving Board Example

The chart shows an example of a diving board chart pattern on the weekly scale in Albemarle (ALB), outlined in red.

Price moves horizontally in a congestion region for about four months before making a plunge lower. Traders versed in chart patterns will recognize a descending triangle (thin green line on the top, red below).

The stock reversed after the plunge bottomed in February. The stock recovered nicely and continued to soar above the top of the diving board pattern.

-- Thomas Bulkowski

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Other Diving Board Examples

See Also

Written by and copyright © 2005-2018 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. You're at the end of the road again.