As of 08/20/2019
  Indus: 25,962 -173.35 -0.7%  
  Trans: 10,006 -75.35 -0.7%  
  Utils: 834 -1.95 -0.2%  
  Nasdaq: 7,949 -54.25 -0.7%  
  S&P 500: 2,901 -23.14 -0.8%  
YTD
 +11.3%  
 +9.1%  
 +17.0%  
 +19.8%  
 +15.7%  
  Targets    Overview: 08/15/2019  
  Up arrow27,200 or 24,900 by 09/01/2019
  Up arrow10,700 or 9,550 by 09/01/2019
  Up arrow850 or 790 by 09/01/2019
  Up arrow8,200 or 7,400 by 09/01/2019
  Up arrow3,000 or 2,750 by 09/01/2019
As of 08/20/2019
  Indus: 25,962 -173.35 -0.7%  
  Trans: 10,006 -75.35 -0.7%  
  Utils: 834 -1.95 -0.2%  
  Nasdaq: 7,949 -54.25 -0.7%  
  S&P 500: 2,901 -23.14 -0.8%  
YTD
 +11.3%  
 +9.1%  
 +17.0%  
 +19.8%  
 +15.7%  
  Targets    Overview: 08/15/2019  
  Up arrow27,200 or 24,900 by 09/01/2019
  Up arrow10,700 or 9,550 by 09/01/2019
  Up arrow850 or 790 by 09/01/2019
  Up arrow8,200 or 7,400 by 09/01/2019
  Up arrow3,000 or 2,750 by 09/01/2019

Bulkowski's Bump-and-Run Reversal Tops

 

Statistics updated on 7/31/2018. Rank updated on 7/26/19.

For more information on this pattern, read Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right, pages 132 to 148. That chapter gives a complete review of the chart pattern, compared to what is described below.

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

-- Tom Bulkowski

$ $ $

The bump-and-run reversal top is a chart pattern that is a good performer in both bull and bear markets, judging by the comparatively low break even failure rate and high average decline after the breakout. The chart pattern was discovered by Thomas Bulkowski in 1996 while researching price prediction techniques using trendlines. Originally called the bump-and-run formation (BARF), the name was changed for obvious reasons.

A bump and run reversal top appears

Bump-and-Run Reversal Top

Important Bull Market Results for Bump-and-Run Reversal Top

Overall performance rank (1 is best): 1 out of 53
Break even failure rate: 9%
Average decline: 19%
Pullback rate: 64%
Percentage meeting price target: Not measured

The above numbers are based on 1,489 perfect trades. See the glossary for definitions.

Bump-and-Run Reversal Top Identification Guidelines

Consult the associated figure on the right.

CharacteristicDiscussion Measure lines for a bump and run reversal appear.
BARR Top
Arithmetic scaleUse the arithmetic chart, not the semi logarithmic one because you will use it to measure vertical distances.
Rising trendlineA trendline connecting the price valleys rises upward at 30 to 45 degrees, but this varies with scaling. Do not use horizontal or near-horizontal trendlines and avoid patterns with steep (over 60 degrees) trendlines.
Lead-in phaseThe lead-in is the section at the start of the pattern and it precedes the bump phase. Price follows a rising trendline. The figure to the lower right shows an example.
Lead-in heightThe tallest distance in the first quarter of the chart pattern, measured vertically, is the lead-in height. Must be at least $1, but preferably $2 or more. The chart on the right shows the measure between the two blue dots, vertically, from trendline to price low.
Lead-in durationAt least a month, but be flexible.
Bump phasePrice rises in the bump phase following a steeper trendline (45 to 60 degrees) on high volume usually after a favorable event (earnings report, rating upgrades). Price rounds over and eventually returns to the lower, 30-degree trendline setup in the lead-in phase. The chart on the right shows an example.
Bump heightMeasured from the peak to the 30-degree trendline, it should be at least twice the lead-in height (but be flexible). The chart on the right shows an example between the two blue dots.
Downhill runAfter price returns to the 30-degree trendline, price may bump up and form additional bumps or slide along the trendline before plunging lower in a downhill run. The figure to the right shows one bump up followed by the downhill run.
VolumeHigh at the start of the pattern, at the bump start, and at the downward breakout (where price pierces the 30-degree trendline).
ConfirmationThe pattern confirms as a valid one when price closes below the 30-degree trendline. If price does not close below the trendline, then you do NOT have a valid pattern.
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Bump-and-Run Reversal Top Trading Tips

Consult the associated figure on the right.

Trading TacticExplanation Measure lines for a bump and run reversal appear.
The Measure Rule
Measure ruleCompute the lead-in height then multiply it by 78% (the old stat for 'percentage meeting price target'). Subtract the result from the breakout price (B) to get a target.
BreakoutSell an existing holding or sell short when price closes below the 30-degree trendline AB at B.
ConfirmationWait for confirmation before placing a trade.
Warning lineDraw a line parallel to the 30-degree trendline and lead-in height above it (the lowest line parallel to AB). The line warns that the stock is making a move and is entering the sell zone, an area between the warning and sell lines.
Sell lineDraw additional trendlines parallel to the warning line, each lead-in height above it (E, shown as the green arrows). Consider selling when price touches the sell line, especially if the bump is narrow not rounded. Delay selling if price continues moving up. When the stock rounds over and touches a lower sell line (C), then close out your position. The figure to the right shows the sell lines and price piercing a lower sell line, suggesting it is time to take profit.
PullbacksPullbacks hurt performance. The link to the left defines a pullback, and this link shows performance.
Dual bumps18% show additional bumps after the first one. The second bump would begin at B, rise up, round over and crash through the 30-degree trendline for a downward breakout.
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Bump-and-Run Reversal Top Example

bump and run reversal chart pattern example

The above figure shows an example of a bump and run reversal top chart pattern, highlighted by the blue trendline.

Price begins the bump and run reversal at A and moves up in a confined trading range until the bump phase begins at B. Price zooms upward and then moves in a wide trading range, forming a descending triangle chart pattern (red lines). Price tumbles downward out of the descending triangle and pierces the 30-degree trendline at C, staging a breakout.

-- Thomas Bulkowski

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Other Bump-and-Run Reversal Top Examples

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:      New                  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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