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Bulkowski’s Partial Rises
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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P 500 (^GSPC):
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As of 03/12/2010
10,624.69 12.85 0.1%
4,325.35 4.97 0.1%
376.80 -1.99 -0.5%
2,367.66 -0.80 0.0%
1,149.99 -0.25 0.0%
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YTD
1.9%
5.5%
-5.3%
4.3%
3.1%
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Tom’s Targets
 380 by 03/15/2010 |
CPI:  on 02/09/2010 |
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Written by and copyright © 2005-2009 by Thomas N. Bulkowski. All rights reserved.
Partial rises are looping chart
patterns that appear at the end of broadening patterns and
rectangles. They predict an
immediate downward breakout.
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Partial Rise Chart Pattern
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Identification Guidelines
| Characteristic | Discussion |
| Established | The rectangle or broadening
chart pattern should be an established one, meaning that it should obey all of the identification guidelines for that pattern.
Don’t look for a partial rise until you have a completed rectangle or broadening chart pattern. |
| Bottom trendline | Price should touch the bottom
trendline and move up but not touch or come that close to the top trendline before heading back down. When price touches the
lower trendline, it usually stages an immediate downward breakout. Sometimes, it may linger at the lower trendline before
plunging through. If price rebounds, close out your position. |
| Breakout | Downward. This usually occurs immediately after the partial rise touches the lower trendline. |
| Pause | Price often pauses partway across a chart pattern so it may look like a partial rise is forming. Wait for price to head back down before shorting the stock. |
Trading Tips
| Trading Tactic | Explanation |
| Price loop | If price bounces off the lower trendline and heads back up, then rounds over before coming close to the top trendline, then it may be a partial rise. Short
once it’s clear that price is heading back toward the lower trendline. |
| Fibonacci | A trend reversal at the 50% or 62% Fibonacci retrace of the prior down move may signal a partial rise. |
| Pause | Price may pause at the lower trendline, perhaps slide along it before breaking out downward. |
| Cover | Cover your short if price bounces off the lower trendline and heads back up. |
| Breakout | Expect a downward breakout after a partial rise. |
Patterns
The following table shows how often a partial rise correctly predicts a downward breakout in bull markets.
| Chart Patterns | Success
Rate |
| Broadening bottoms | 67% |
| Broadening formations, right-angled and ascending | 74% |
| Broadening formations, right-angled and descending | 54% |
| Broadening tops | 61% |
| Broadening wedges, ascending | 74% |
| Broadening wedges, descending | 14% |
| Rectangle bottoms | 74% |
| Rectangle tops | 57% |
Example
The above figure shows an example of a broadening bottom
chart pattern. This broadening bottom is not my favorite example because price does not cross the pattern often enough.
In other words, there is too much white space in the middle to end of the pattern. Nevertheless, price touches each
trendline boundary often enough so the broadening pattern is established. Price in the partial rise attempts to reach
the top trendline but fails. This partial rise is a gentle turn that leads to an immediate downward breakout.
-- Thomas Bulkowski
Copyright © 2005-2009 by Thomas N. Bulkowski. All rights reserved. I’ve told you a million times, don’t exaggerate!
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