As of 01/27/2023
Indus: 33,978 +28.67 +0.1%
Trans: 14,483 +191.14 +1.3%
Utils: 968 +1.08 +0.1%
Nasdaq: 11,622 +109.30 +0.9%
S&P 500: 4,071 +10.13 +0.2%
|
YTD
+2.5%
+8.1%
+0.0%
+11.0%
+6.0%
|
|
As of 01/27/2023
Indus: 33,978 +28.67 +0.1%
Trans: 14,483 +191.14 +1.3%
Utils: 968 +1.08 +0.1%
Nasdaq: 11,622 +109.30 +0.9%
S&P 500: 4,071 +10.13 +0.2%
|
YTD
+2.5%
+8.1%
+0.0%
+11.0%
+6.0%
| |
| ||
Released 12/21/2020.
The inverted V pivot is a 3-bar pattern based on Vicky Wong's V pivot except that it's flipped upside down. I tested the performance of the pattern and present the results below.
Inverted V Pivot
|
The above numbers are based on almost 1,400 perfect trades on the weekly scale. See the glossary for definitions.
Refer to the image to the right of the table.
Characteristic | Discussion | |
Weekly chart | Use the weekly chart to locate V pivots. | |
Price trend | Usually (63% of the time) upward leading to the pattern. | |
Shape | Looks like an inverted V, a 3-bar pattern with the middle bar (2) above the adjacent ones (1, 3), as shown in the picture to the right. | |
Percentages | For identification, I put a 2% minimum on each price bar. By that, I mean the high price of bar 2 is at least 2% above the high prices of bars 1 and 3. | |
Confirmation | The pattern confirms as valid when price closes below the lowest price of the three bars. In this example, that means a close below bar 3. |
Trading Tactic | Explanation | The Measure Rule
|
Measure rule | See the Measure Rule figure to the right. Compute the height from the lowest price (point B) to the highest price (A) in the 3-week pattern. Subtract the height from the bottom of the pattern (B) to get the price target (C). Price reaches the target 41% of the time on average, so be conservative in your projections. | |
Uptrends | Inverted V pivots will usually (63% act as reversals of the uptrend) mark the end of a short-term uptrend. The images in this article provide examples. | |
Breakout | A breakout occurs when price closes below the lowest price bar in the 3-bar pattern. In the figure, that means a close below B. | |
Confirmation | The pattern confirms as valid when price breaks out downward. Because the pattern is short, place an order to short the stock a penny below the lowest bar in the 3-bar pattern. That way, you'll enter a trade with less slippage. |
Here is a slider show of three examples.
-- Thomas Bulkowski
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