As of 10/03/2024
  Indus: 42,012 -184.93 -0.4%  
  Trans: 15,745 -226.81 -1.4%  
  Utils: 1,058 -6.74 -0.6%  
  Nasdaq: 17,918 -6.64 0.0%  
  S&P 500: 5,700 -9.60 -0.2%  
YTD
 +11.5%  
-1.0%  
 +20.0%  
 +19.4%  
 +19.5%  
  Targets    Overview: 09/30/2024  
  Up arrow43,500 or 41,600 by 10/15/2024
  Up arrow16,800 or 15,700 by 10/15/2024
  Up arrow1,125 or 1,025 by 10/15/2024
  Up arrow19,000 or 17,600 by 10/15/2024
  Up arrow5,900 or 5,600 by 10/15/2024
As of 10/03/2024
  Indus: 42,012 -184.93 -0.4%  
  Trans: 15,745 -226.81 -1.4%  
  Utils: 1,058 -6.74 -0.6%  
  Nasdaq: 17,918 -6.64 0.0%  
  S&P 500: 5,700 -9.60 -0.2%  
YTD
 +11.5%  
-1.0%  
 +20.0%  
 +19.4%  
 +19.5%  
  Targets    Overview: 09/30/2024  
  Up arrow43,500 or 41,600 by 10/15/2024
  Up arrow16,800 or 15,700 by 10/15/2024
  Up arrow1,125 or 1,025 by 10/15/2024
  Up arrow19,000 or 17,600 by 10/15/2024
  Up arrow5,900 or 5,600 by 10/15/2024

Bulkowski on the Horn Bottom Chart Pattern

Statistics updated on 8/27/2020.

For more information on this pattern, read Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right, pages 115 to 131.

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

-- Tom Bulkowski

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Horn bottoms are H-shaped chart patterns that appear on all time scales, but the weekly charts show better performance over those appearing on the dailies. Discovered by Thomas Bulkowski in 1998. The statistics in this article were gathered from patterns on the weekly scale.

Horn bottom chart pattern
Horn Bottom Chart Pattern

 

Horn Bottoms: Important Bull Market Results

Overall performance rank (1 is best): 2 out of 3 (weekly scale)
Break even failure rate: 6%
Average rise: 59%
Percentage meeting price target: 74%

The above numbers are based on more than 1,000 perfect trades on the weekly scale. See the glossary for definitions.

Horn Bottoms: Identification Guidelines

CharacteristicDiscussion
Weekly chartUse the weekly chart to locate horns.
Price trendDownward leading to the pattern.
ShapeLooks like an inverted steer's horn, two parallel price spikes separated by a week.
SpikesThe spikes should be longer than most in the past year, but in the updated statistics, I didn't concern myself with spike length and performance improved... They should plummet below the surrounding price landscape, including the middle week.
ConfirmationThe pattern confirms as valid when price closes above the highest price in the 3-week pattern.

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Horn Bottoms: Trading Tips

Trading TacticExplanation Horn bottom chart pattern measure rule
The Measure Rule

Horn bottom chart pattern left spike volume

Spike Volume

Horn bottom chart pattern as an inside week

Inside Week
Measure ruleSee the Measure Rule figure to the right. Compute the height from the highest price (point A) to lowest price (B) in the 3-week pattern then multiply it by the above 'percentage meeting price target.' Add the result to the highest high in the pattern (A) to get a target (C).
UptrendsSome horns appear near the end of uptrends, so watch for a trend change.
DowntrendsHorns will usually not mark the end of a downtrend, but they will be close, say within a buck or so.
HeightTall horns perform better than short ones.
VolumeHorns with heavy breakout volume tend to do well. Horns with volume heavier on the left spike and light on the right tend to outperform. The Spike Volume figure to the right shows an example of heavy left spike volume.
Inside weekWhen the right horn is inside the trading range of the left horn (an inside week), the horn tends to outperform. The Inside Week figure to the right shows an example of this. Spike AB is taller and completely covers spike CD.
Price DifferenceHorns with a large price difference between the spike valleys tend to outperform. Using the Inside Week figure to the right, that means the price difference between bottoms B and D.
ConfirmationWait for price to close above the highest price in the pattern before taking a position. However, you can enter a trade by placing a buy stop a penny above the top of the highest price in the 3-week pattern.

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Horn Bottoms: Example

Horn bottom chart pattern example

The above figure shows two examples of horn bottoms on the weekly scale. Each pair of red Hs represents one horn bottom. Price confirms the pattern when it closes above the highest peak in the 3-week pattern. I show this as a red line. Buy the following week or place a buy stop at the confirmation price.

-- Thomas Bulkowski

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See Also

 

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