As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
|
 46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 |
As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
| |
|
46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 | ||
Statistics updated on 8/27/2020.
For more information on this pattern, read
Encyclopedia of Chart Patterns Second Edition
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Pipe bottoms are okay performers in a bull market when performance is measured on the weekly scale. However, compared against other patterns on the same scale, they place last. Pipes have a small breakeven failure rate and high average rise. Discovered by Thomas Bulkowski in 1998.
Pipe Bottom Pattern
|
The above numbers are based on more than 8,800 perfect trades. See the glossary for definitions.
| Characteristic | Discussion |
| Weekly chart | Pipes appear on the daily scale but the ones on the weekly charts perform better. Use the weekly chart. |
| Price trend | Usually downward leading to the pattern. |
| Shape | Twin and adjacent downward spikes. On a bar chart, the two price bars look like spikes. On a candlestick chart, the candles can be any shape (from doji to Marubozu). In other words, don't let the term spike mislead you. |
| Overlap | The 2 weeks often have a large price overlap but need not bottom at the same price. The bottom price variation is 1%. |
| Volume | Most pipes show above average volume on one or both spikes. |
| Obvious | The pipe should stand-alone and be obvious on the chart. The spike should clear the surrounding price action. |
| Downtrends | The best performing pipes appear at the end of downtrends. |
| Confirmation | The pattern confirms (becomes a valid pattern) when price closes above the highest high in the pattern. |
| Trading Tactic | Explanation | 
The Measure Rule
Spike
|
| Measure rule | Compute the height from the taller of the two spikes to the lower of the two (the AB distance in the Measure Rule figure to the right) then multiply by the above 'percentage meeting price target.' Add the difference to the higher of the two (A) to get a price target, C. | |
| Buy | Buy when price closes above the higher of the two spikes. I show that as A in the Measure Rule figure to the right. | |
| Trends | Pipes with a short-term (up to 3 months) downtrend leading to the pipe perform best. | |
| Uneven lows | Pipes with uneven lows tend to perform better than do those with spikes that bottom at the same price. The Spike figure shows an example of spikes with uneven lows (spike B is lower than spike A). | |
| Yearly low | Pipes within a third of the yearly low perform best. | |
| Volume | Heavy left spike volume when compared to the right suggests better performance. | |
| Stop | If price closes below the lower of the two spikes, then close out your position. |
The above figure shows an example of a pipe bottom chart pattern. This pipe bottom appears as part of a retrace in an uptrend, signaling higher prices ahead. The retrace begins at A and bottoms at the pipe then price begins its recovery. Shown on the weekly scale.
-- Thomas Bulkowski
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