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 | ||
Updated: 9/19/22
This article discusses the various shapes price takes as it forms tops and bottoms. Those shapes are sometimes called Adam and Eve. The information presented here applies to both tops and bottoms. I use double bottom and double top chart patterns because their main feature is an Adam or Eve peak or valley.
Adam and Eve double bottoms come in four varieties: Adam & Adam, Adam & Eve, Eve & Eve, and Eve & Adam.
Each peak or valley is either wide or narrow. Wide ones are called Eve and narrow ones are called Adam.
But what is wide and what is narrow?
Answering that can be confusing for both novices and experts alike. Sometimes a chart pattern can be difficult to assess, especially when you zoom in to a shorter time scale. However, I've created some identification rules which I'll discuss later.
Let's discuss Eve bottoms and I show one in the chart of Lexmark (LXK) on the daily scale. Eve is wide, rounding appearing. If it has downward spikes, they are numerous and often short. Notice how the top of the Eve bottom is very wide. I denote that with a green line between points B and C.
Compare the width of BC with AB. Notice that the Eve bottom is much wider at its top than is the Adam top (the next chart shows a better example of a narrow Adam peak which remains slender along its height). That is one of the key ways of telling an Adam bottom or top from an Eve.
Here are the four varieties of double tops: Adam & Adam, Adam & Eve, Eve & Eve, and Eve & Adam. The links take you to the pages which discuss the chart patterns.
Here's what double tops look like. The left portion of the picture shows Abbott Labs with two narrow looking Adam spikes. Those are the two Adam tops (A and A).
I also identified an Adam (bottom) and Eve (top) as stand-alone features (not part of a chart pattern).
On the right portion of the chart near the top right, the Adam peak (A) contrasts to the width of the Eve (E) top for Accenture stock.
The Adam peak is slender throughout its height but Eve is rounded looking. It tends to widen slightly as price drops (meaning the base of the pattern is wider than the top whereas the Adam peak tends to remain slender).
Another example appears as the pair Eve and Adam peaks followed by an Eve valley. Again, Adam is tall and slender but Eve is wide. I show another Eve bottom in the middle of the Accenture chart.
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To make identification easier, ask yourself if the two peaks or valleys look the same or different. If they are the same, then you are dealing with Adam & Adam or Eve & Eve. If one is wide and the other is narrow, then it is either Adam & Eve or Eve & Adam.
Now that you can identify the various combinations of Adam and Eve, so what? My book, Encyclopedia of Chart Patterns, 3rd edition (#ad) discusses the details of Adam and Eve tops and bottoms. The various combinations behave differently so that if you can identify them correctly, you can use that information to your advantage.
Eve & Eve double bottoms, for example, tend to be star performers. Tests show that the average rise beats the other three combinations of Adam and Eve. Another example: Eve & Eve double tops have the lowest failure rate of the four combinations of Adam and Eve double tops. Both of these findings are current as of 2021 and shown in the 3rd edition of my book.
When your son or daughter asks about Adam and Eve, you now have a wonderful bedtime story to tell them.
-- Thomas Bulkowski
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