As of 11/26/2021
  Indus: 34,899 -905.04 -2.5%  
  Trans: 16,216 -610.57 -3.6%  
  Utils: 907 -15.90 -1.7%  
  Nasdaq: 15,492 -353.57 -2.2%  
  S&P 500: 4,595 -106.84 -2.3%  
YTD
 +14.0%  
 +29.7%  
 +4.9%  
 +20.2%  
 +22.3%  
  Targets    Overview: 11/12/2021  
  Up arrow38,000 or 35,000 by 12/01/2021
  Up arrow17,700 or 16,000 by 12/01/2021
  Up arrow935 or 890 by 12/01/2021
  Up arrow16,400 or 15,350 by 12/01/2021
  Up arrow4,850 or 4,560 by 12/01/2021
CPI (updated daily): Arrows on 11/17/21
As of 11/26/2021
  Indus: 34,899 -905.04 -2.5%  
  Trans: 16,216 -610.57 -3.6%  
  Utils: 907 -15.90 -1.7%  
  Nasdaq: 15,492 -353.57 -2.2%  
  S&P 500: 4,595 -106.84 -2.3%  
YTD
 +14.0%  
 +29.7%  
 +4.9%  
 +20.2%  
 +22.3%  
  Targets    Overview: 11/12/2021  
  Up arrow38,000 or 35,000 by 12/01/2021
  Up arrow17,700 or 16,000 by 12/01/2021
  Up arrow935 or 890 by 12/01/2021
  Up arrow16,400 or 15,350 by 12/01/2021
  Up arrow4,850 or 4,560 by 12/01/2021
CPI (updated daily): Arrows on 11/17/21

Bulkowski on the Bullish Crab®

 

Initial release: 8/9/2018. Statistics updated on 8/28/2020.

Overview

This article describes my analysis of the bullish crab pattern as described by publicly available information and common sense rules to determine valid patterns. Additional rules may or may not improve performance. I tested the pattern using only the below identification guidelines.

The bullish crab can resemble a double top chart pattern except that the turns are located using Fibonacci ratios. It's very rare, and you'll need a computer with pattern recognition software to fine it.

The crab pattern
Bullish Crab

 

Bullish Crab: Important Bull Market Results

Overall performance rank for upward moves (1 is best): 3 out of 5 (versus other Fibonacci based patterns, only).
Break even failure rate: 7%
Average rise/decline: 39%
Percentage reversing at point D: 92%

The above numbers are based on over 550 perfect trades in a bull market. See the glossary for definitions.

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Bullish Crab: Identification Guidelines

Because of the many ratios used, the pattern is rare. I found a few more than 550 of them since 1990. The statistics in this article only apply to bull markets.

You'll need a computer with software to find the pattern.

Find five peaks/valleys where the ratio of one leg to another is one of the Fibonacci numbers listed in the figure. However, I used a 3 percentage point window on the last ratio to keep the sample count high.

 Characteristic Discussion crab retraces
Bullish Crab Ratios
Peaks/ValleysThe peaks and valleys in the pattern need not be consecutive. This is not a guideline, but an observation.
XABPrice drops to valley X, the first point in the pattern. It rises from there to A and retraces to B. The retrace value is shown in the figure
ABCTurn ABC shows a CB/AB retrace of one of the following Fibonacci ratios shown.
BCDExtension CD/CB is one of three Fibonacci ratios.
XADRetrace AD/AX is 161.8%.

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Bullish Crab: Trading Tips

I don't offer much trading help because I'm new to this pattern.

Price may rise after point D. Indeed, that happens 92% of the time.

You may have better luck with the pattern if underlying support is near the XD valleys.

For targeting, price rises to the price of X 65% of the time, to A 33% of the time, to B 48% of the time, and to C 36% of the time.

Bullish Crab: Example

An example crab pattern

The figure above shows an example of a bullish crab pattern, XABCD.

Here are the high/low prices of the various turns

X: 39.65 - 38.65
A: 41.90 - 41.32
B: 40.23 - 39.60
C: 41.36 - 40.89
D: 38.95 - 36.62

Here are the ratios.

AB/AX = (41.90-39.60)/(41.90-38.65) or 70.7%, using the low at B. Using the high at B, we get: (41.9-40.23)/(41.9-38.65) or 51%. The high-low range encompasses the 61.8% retrace, so I allow it.

CB/AB = (41.36-39.60)/(41.90-39.60) or 76.5%, using the high at C. The low at C gives (40.89-39.60)/(41.90-39.60) or 56%, which encompasses the 70.7% retrace, so I allow this.

CD/CB = (41.36-36.62)/(41.36-39.60) or 269.3%. However, the high-low range of D (41.36-38.95)/(41.36-39.60) or 136.9% encompasses the 261.8% retrace, so it's allowed.

AD/AX = (41.90-36.62)/(41.90-38.65) or 162.5% which is within three percentage points of 161.8%, so it's allowed.

Price breaks out upward at E and throws back to the breakout price and keeps dropping, to F before recovering slightly. The stock drifted below the breakout price, as the chart shows.

-- Thomas Bulkowski

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See Also

 

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My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Encyclopedia of Candlestick Charts Trading Classic Chart Patterns

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