As of 04/12/2024
  Indus: 37,983 -475.84 -1.2%  
  Trans: 15,498 -250.79 -1.6%  
  Utils: 855 -6.47 -0.8%  
  Nasdaq: 16,175 -267.11 -1.6%  
  S&P 500: 5,123 -75.65 -1.5%  
YTD
 +0.8%  
-2.5%  
-3.0%  
 +7.8%  
 +7.4%  
  Targets    Overview: 04/12/2024  
  Up arrow39,800 or 37,700 by 05/01/2024
  Up arrow16,200 or 15,000 by 05/01/2024
  Up arrow885 or 850 by 05/01/2024
  Up arrow16,700 or 15,800 by 05/01/2024
  Up arrow5,250 or 5,025 by 05/01/2024
As of 04/12/2024
  Indus: 37,983 -475.84 -1.2%  
  Trans: 15,498 -250.79 -1.6%  
  Utils: 855 -6.47 -0.8%  
  Nasdaq: 16,175 -267.11 -1.6%  
  S&P 500: 5,123 -75.65 -1.5%  
YTD
 +0.8%  
-2.5%  
-3.0%  
 +7.8%  
 +7.4%  
  Targets    Overview: 04/12/2024  
  Up arrow39,800 or 37,700 by 05/01/2024
  Up arrow16,200 or 15,000 by 05/01/2024
  Up arrow885 or 850 by 05/01/2024
  Up arrow16,700 or 15,800 by 05/01/2024
  Up arrow5,250 or 5,025 by 05/01/2024

Bulkowski's Trading Pattern Pairs

Released 6/1/2022.

Trading Pattern Pairs

Below are three examples of trading pattern pairs.

 

1 / 3
chart pattern

The pattern pairs chosen for this trade are a double bottom and a double top.

Buy the double bottom which appears at AB. Placing a buy stop a penny above the top of the pattern (C) gets you into the trade at 7.18. Hold until the first double top appears. That happens at DE. Place a stop order a penny below the bottom of the double top (F), and it fills at 10.66. Gain on this trade was 48% in about 6 months.

Next slide shows a trade using a head-and-shoulders bottom and triple top.
2 / 3
chart pattern

A head-and-shoulders bottom appears at LS (left shoulder), head, and RS (right shoulder). The red neckline usually provides the buy signal, but I chose to use the right armpit as a more conservative entry signal (trying to determine the price of the diagonal red line is difficult). Place a buy order a penny above D and it fills at 22.94.

The exit signal appears as triple top ABC (which is also an ascending triangle). At E, price hits a stop loss order placed a penny below the bottom of the chart pattern and fills at 26.35.

This trade made 15% in less than 6 months (Note: I purposely chose buy and sell signals that fit on one chart for all three trades shown in this article).

The next chart shows a losing trade.
3 / 3
chart pattern

Here we have a buy signal as triple bottom ABC. Entry is a penny above the top of the chart pattern, D, at 169.76.

For the sell signal, we use a double top, DE. The sell order is a penny below the bottom of it but because price gapped open lower at F, it filled at 139.20.

This trade lost 22% in less than 4 months.

Note that this is a bottom fishing trade where the triple bottom is supposed to call the turn. It does, but not for long. The chart shows price trending lower throughout the trade.

Dne ehT (The End spelled backwards)

See Also

 
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