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Bulkowski's Spikes or Tails

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As of 06/21/2019
  Industrials: 26,719 -34.04 -0.1%  
  Transports: 10,352 -60.17 -0.6%  
  Utilities: 826 +4.45 +0.5%  
  Nasdaq: 8,032 -19.63 -0.2%  
  S&P 500: 2,950 -3.72 -0.1%  
YTD
 +14.5%  
 +12.9%  
 +15.9%  
 +21.0%  
 +17.7%  
  Tom's Targets    Overview: 06/13/2019  
  Up arrow26,800 or 25,400 by 07/01/2019
  Up arrow10,700 or 9,900 by 07/01/2019
  Up arrow830 or 780 by 07/01/2019
  Up arrow8,150 or 7,575 by 07/01/2019
  Up arrow3,000 or 2,875 by 07/01/2019
As of 06/21/2019
  Industrials: 26,719 -34.04 -0.1%  
  Transports: 10,352 -60.17 -0.6%  
  Utilities: 826 +4.45 +0.5%  
  Nasdaq: 8,032 -19.63 -0.2%  
  S&P 500: 2,950 -3.72 -0.1%  
YTD
 +14.5%  
 +12.9%  
 +15.9%  
 +21.0%  
 +17.7%  
  Tom's Targets    Overview: 06/13/2019  
  Up arrow26,800 or 25,400 by 07/01/2019
  Up arrow10,700 or 9,900 by 07/01/2019
  Up arrow830 or 780 by 07/01/2019
  Up arrow8,150 or 7,575 by 07/01/2019
  Up arrow3,000 or 2,875 by 07/01/2019

Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.

My book, Getting Started in Chart Patterns, Second EditionGetting Started in Chart Patterns, Second Edition book., pictured on the left, has a section titled, "Spikes and Tails," starting on page 212, that may interest you.

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

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Spikes, or tails as they are sometimes called, represent short-term price turning points. Bullish spikes plunge downward and are more reliable than those that tower upward. This may be due to the upward bias the stock market has shown over time (for proof, look at the price of the Dow in the 1920s -- it was below 400).

 

 

Spikes or tails chart pattern

Spikes or Tails Chart Pattern

Spikes or Tails: Identification Guidelines

CharacteristicDiscussion
Price trendCan be any direction leading to the pattern, but is usually in the direction of the spike (downward for bullish spikes, upward for bearish spikes).
ShapeA tall price move with the closing price near the base of the spike.
Closing priceFor upward spikes, the close should be near the intraday low. For downward spikes, the close should be near the intraday high.
VolumeUsually heavy.
Bullish spikePrice spikes downward before closing near the intraday high. Price often represents a low turning point.
Bearish spikePrice spikes upward but closes near the intraday low. Price often forms a peak but usually does not represent a major or sustained turning point.
Wait a dayWait a day to be sure that the price spike stands alone like the above picture shows.
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Spikes or Tails: Trading Tips

Trading TacticExplanation
Upward spikeFor swing traders, expect a downward price swing. The turn may not last long, however.
Downward spikeDownward spikes represent more reliable price turning points than do upward ones. Buy once it's clear the spike or tail stands alone like a tall pine tree on a barren hill (that is, if you can imagine the hill and tree upside down).
Short termBoth upward and downward price spikes usually represent short-term turning points. Thus, don't expect price to make a major and lasting trend change.
CautionBe cautious with spikes where the close is not near the intraday low (upward spike) or high (downward spike).

-- Thomas Bulkowski

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Other Spikes or Tails Examples

  • Tail in the Nasdaq composite, Jan 2010 (near end of post)

See Also

Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners. I like you, but I wouldn't want to see you working with sub-atomic particles.