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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's Top 10 Reversals and Continuations

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Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 04/17/2014
16,409 -16.31 -0.1%
7,634 42.88 0.6%
543 -5.75 -1.0%
4,096 9.29 0.2%
1,865 2.54 0.1%
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3.2%
10.7%
-1.9%
0.9%
Tom's Targets    Overview: 04/11/2014
16,600 or 15,900 by 05/01/2014
7,700 or 7,150 by 05/01/2014
560 or 530 by 05/01/2014
4,250 or 3,900 by 05/01/2014
1,900 or 1,800 by 05/01/2014
Mutt Winners: None YTD

Written and copyright © 2008-2013 by Thomas N. Bulkowski. All rights reserved.

The following are the top 10 performing chart reversal and continuation patterns. A complete list of chart patterns for both bull and bear markets is available in an Excel spreadsheet by clicking here.

 

Top 10 Reversals and Continuations: Summary

By taking the average of the averages, which is unscientific (but it does give a hint), we find that chart patterns acting as reversals outperform those continuing to trend in both bull and bear markets.

The following covers the top ten performers in bull markets only.

Top 10 Reversals, Upward Breakouts

Chart pattern

Average Rise

Flags, High and Tight, up breakout

69%

Triangles, Descending, up breakout

58%

Scallops, Ascending and Inverted, up breakout

47%

Broadening Wedges, Ascending, up breakout

46%

Rectangles Bottoms, up breakout

46%

Three Rising Valleys, up breakout

46%

Pipe Bottom, up breakout

45%

Bump-and-Run Reversal Bottoms, up breakout

40%

Double Bottoms, Eve & Eve, up breakout

40%

Head-and-Shoulders Bottoms, up breakout

38%

Top 10 Continuations, Upward Breakouts

Chart Pattern

Average Rise

Diamond Bottoms, up breakout

58%*

Rounding Bottoms, up breakout

47%

Triangles, Descending, up breakout

43%

Scallops, Ascending and Inverted, up breakout

41%

Rectangles Tops, up breakout

39%

Rounding Tops, up breakout

38%

Triple Bottoms, up breakout

38%

Broadening Wedges, Descending, up breakout

38%

Broadening Wedges, Ascending, up breakout

36%

Bump-and-Run Reversal Bottoms, up breakout

36%

* Based on fewer than 30 samples

Top

Top 10 Reversals, Downward Breakouts

Chart Pattern

Average Decline

Head-and-Shoulders Tops, Complex, down breakout

23%*

Islands, Long, down breakout

23%

Broadening Wedges, Descending, down breakout

22%

Head-and-Shoulders Tops, down breakout

22%

Diamond Tops, down breakout

22%

Horn Tops, down breakout

21%

Bump-and-Run Reversal Tops, down breakout

21%

Pipe Tops, down breakout

20%

Rounding Tops, down breakout

20%

Diamond Bottoms, down breakout

19%

* Based on fewer than 30 samples

Top 10 Continuations, Downward Breakouts

Chart Pattern

Average Decline

Islands, Long, down breakout

22%

Diamond Bottoms, down breakout

21%

Broadening Formations, Right-Angled and Descending, down breakout

20%

Broadening Formations, Right-Angled and Ascending, down breakout

20%

Rounding Tops, down breakout

20%

Broadening Wedges, Descending, down breakout

19%

Triangles, Ascending, down breakout

19%

Diamond Tops, down breakout

19%*

Triple Tops, down breakout

19%

Pennants, down breakout

19%

* Based on fewer than 30 samples

Notes:

The average rise and decline is for hundreds of ‘perfect trades' without commissions or fees deducted. Each reversal or continuation measures from the breakout to the ultimate high (upward breakout) or low price ( downward breakout). The ultimate high is the highest high before price drops by at least 20%. The ultimate low is the lowest low before price rises by at least 20%. Other restrictions apply, but you get the idea.

-- Thomas Bulkowski

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Copyright © 2008-2013 by Thomas N. Bulkowski. All rights reserved. I don't care what star you're following! Get those camels off my lawn!