As of 07/19/2019
  Industrials: 27,154 -68.77 -0.3%  
  Transports: 10,604 +66.69 +0.6%  
  Utilities: 820 -11.25 -1.4%  
  Nasdaq: 8,146 -60.75 -0.7%  
  S&P 500: 2,977 -18.50 -0.6%  
YTD
 +16.4%  
 +15.6%  
 +15.0%  
 +22.8%  
 +18.7%  
  Tom's Targets    Overview: 07/12/2019  
  Down arrow26,500 or 28,000 by 08/01/2019
  Down arrow10,000 or 11,000 by 08/01/2019
  Up arrow850 or 800 by 08/01/2019
  Down arrow7,950 or 8,500 by 08/01/2019
  Down arrow2,900 or 3,075 by 08/01/2019
As of 07/19/2019
  Industrials: 27,154 -68.77 -0.3%  
  Transports: 10,604 +66.69 +0.6%  
  Utilities: 820 -11.25 -1.4%  
  Nasdaq: 8,146 -60.75 -0.7%  
  S&P 500: 2,977 -18.50 -0.6%  
YTD
 +16.4%  
 +15.6%  
 +15.0%  
 +22.8%  
 +18.7%  
  Tom's Targets    Overview: 07/12/2019  
  Down arrow26,500 or 28,000 by 08/01/2019
  Down arrow10,000 or 11,000 by 08/01/2019
  Up arrow850 or 800 by 08/01/2019
  Down arrow7,950 or 8,500 by 08/01/2019
  Down arrow2,900 or 3,075 by 08/01/2019

Bulkowski's Extended V-Bottom

 

Initial release on 7/3/2019. Stats updated on 7/9/19.

Extended V-bottom chart pattern
Extended V-bottoms

Extended V Bottoms: Important Bull Market Results

Overall performance rank for up/down breakouts (1 is best): Not available
Break even failure rate: 7%
Average rise: 39%
Throwback rate: 79%
Percentage meeting price target: 51%*

The price target is the high at the start of the pattern.

The above numbers are based on 345 perfect trades. See the glossary for definitions.

Extended V-Bottoms: Identification Guidelines

I programmed my computer to find V-bottoms because to do it any other way would be unfair. I'd pick the patterns which worked and would not see those which didn't.

Some of the guidelines shown in the table reflect that.

CharacteristicDiscussion
DowntrendLook for price to make a straight-line run downward with few or no pauses, often fitting inside a channel.
WidthAt least 3 weeks to 3 months wide.
ReversalPrice at the bottom of the V will form a one-day reversal, island reversal, or tail, usually on heavy volume, perhaps gapping upward.
TrendlineAfter the reversal, price pierces a down-sloping trendline drawn along the price tops, confirming the trend change.
ExtensionThe extended V bottom is a variation on the v-bottom. After price reverses at the bottom, price climbs for a bit then moves sideways before continuing higher.
RetracePrice on the right side must retrace at least 38.2% of the left side. The retrace value is arbitrary.
BreakoutWhen price retraces 38.2% of the left side, then that's the breakout.
No SpikeI removed any extended V-bottom with a single long price bar as the bottom.
AnglePrice drops and reverses, forming an angle with the vertical. In some extended V-bottoms, the left angle will mirror the right one. For example, if price dropped by 30 degrees, price might rise following a similar angle.

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Extended V-Bottoms: Trading Tips

Trade an extended V bottom once price exits the extension, but you can also get in at the breakout, which is a 38.2% retrace of the left side peak to valley drop. Expect price to approach the price level of the left side of the V (where the decline started), but that could be wishful thinking.

Extended V-Bottoms: Example

Extended V bottom chart pattern example

The above figure shows an example of an extended V bottom chart pattern. The decline into the pattern is unusually steep, meaning it cannot last long, and it doesn't. Price rebounds in a V-shape and then levels out, forming the extension. The extension appears on the chart as a descending triangle -- a flat base with down-sloping top in this example, but the extension can take any shape. The breakout from this congestion pattern is upward and that means a powerful move up, retracing much of the drop leading into the V bottom.

-- Thomas Bulkowski

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See Also

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.
Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns Bumper's Story Head's Law
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