As of 03/18/2024
  Indus: 38,790 +75.66 +0.2%  
  Trans: 15,418 -81.05 -0.5%  
  Utils: 853 +3.06 +0.4%  
  Nasdaq: 16,103 +130.28 +0.8%  
  S&P 500: 5,149 +32.33 +0.6%  
YTD
 +2.9%  
-3.0%  
-3.2%  
 +7.3%  
 +8.0%  
  Targets    Overview: 03/13/2024  
  Down arrow38,000 or 39,350 by 04/01/2024
  Up arrow16,300 or 15,350 by 04/01/2024
  Up arrow885 or 830 by 04/01/2024
  Down arrow15,200 or 16,600 by 04/01/2024
  Up arrow5,250 or 5,000 by 04/01/2024
As of 03/18/2024
  Indus: 38,790 +75.66 +0.2%  
  Trans: 15,418 -81.05 -0.5%  
  Utils: 853 +3.06 +0.4%  
  Nasdaq: 16,103 +130.28 +0.8%  
  S&P 500: 5,149 +32.33 +0.6%  
YTD
 +2.9%  
-3.0%  
-3.2%  
 +7.3%  
 +8.0%  
  Targets    Overview: 03/13/2024  
  Down arrow38,000 or 39,350 by 04/01/2024
  Up arrow16,300 or 15,350 by 04/01/2024
  Up arrow885 or 830 by 04/01/2024
  Down arrow15,200 or 16,600 by 04/01/2024
  Up arrow5,250 or 5,000 by 04/01/2024

Bulkowski on the Measured Move Up Pattern

Updated with new statistics 8/27/2020.

For more information on this pattern, read Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right, pages 510 to 521. That chapter gives a complete review of the chart pattern, including tour, identification guidelines, focus on failures, performance statistics, trading tactics, and sample trade. Below is just a sliver of the information contained in the book.

The idea behind a measured move is that the second leg will equal the first leg in both price and time. That's for the ideal pattern. Reality shows the pattern falls short of expectations.

Measured move up chart pattern
Measured Move Up Chart Pattern Components

 

Measured Move Up: Important Bull Market Results

Overall performance rank for up/down breakouts: Not ranked because of the nature of this pattern
Average first leg price rise: 36% in 38 days
Average corrective phase retrace: 48% in 27 days
Average second leg price rise: 31% in 33 days.
Percentage meeting price target: 60%

The above numbers are based on over 1,000 perfect trades. See the glossary for definitions.

Measured Move Up: Identification Guidelines

I use two methods to find measured moves. The first is manually. That's what the statistics in this chapter show. The other method is automatically, which the following discussion relates to.

The computer algorithm finds three consecutive turns, starting with a minor low (bottom of leg 1) then a minor high (start of the corrective phase), and then a retrace of at least 70%, ending in a minor low (the end of the corrective phase). It's assumed that the next minor high will end the pattern at the top of the second leg. Patternz will find measured moves automatically.

CharacteristicDiscussion
TrendMeasured moves are reversal patterns so look for a downward price trend leading to the start of the measured move (for the best performance).
First legAny minor low which leads to a minor high.
Corrective phaseThe computer algorithm looks for retraces of at least 70%. Those lead to the best measure-rule performance.
Second legPrice ends the pattern at a minor high.

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Measured Move Up: Trading Tips

Trading TacticExplanation Measured move up chart pattern measure rule
The Measure Rule
Measure ruleCompute the length of the first leg from the lowest valley (point A in the Measure Rule figure to the right) to the highest peak at the start of the corrective phase (point B) then multiply it by the above "percentage meeting price target." Add the result to the lowest valley in the corrective phase (point C) to get a price target.
BuyOnce the second leg begins (point C in the Measure Rule figure to the right), buy. If price drops below the corrective phase low (C), close out the trade.
TargetIf price nears the target or overhead resistance abounds near the target, close out the position.
TrendlineIf the projected price target of a measured move intersects a down-sloping trendline setup by prior price action, then expect price to reverse there.
RetraceThe larger the corrective phase retrace (the move from B to C in the Measure Rule figure to the upper right), the better the chance of meeting the price target.

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Measured Move Up: Example

Measured move chart pattern example

The above figure highlights two examples of a measured move up chart pattern. The first leg begins at point A and rises to the top of the corrective phase at B. Then price corrects to C before finishing the measured move up chart pattern at D. You can also nest measured moves. The sequence CDAB forms another measured move up.

Please note that this example was found manually, not using my new algorithm.

-- Thomas Bulkowski

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See Also

 

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