As of 12/02/2024
Indus: 44,782 -128.65 -0.3%
Trans: 17,545 -73.73 -0.4%
Utils: 1,057 -21.90 -2.0%
Nasdaq: 19,404 +185.78 +1.0%
S&P 500: 6,047 +14.77 +0.2%
|
YTD
+18.8%
+10.4%
+19.9%
+29.3%
+26.8%
|
44,000 or 46,000 by 12/15/2024
17,025 or 18,000 by 12/15/2024
1,025 or 1,100 by 12/15/2024
20,000 or 18,500 by 12/15/2024
6,200 or 5,900 by 12/15/2024
|
As of 12/02/2024
Indus: 44,782 -128.65 -0.3%
Trans: 17,545 -73.73 -0.4%
Utils: 1,057 -21.90 -2.0%
Nasdaq: 19,404 +185.78 +1.0%
S&P 500: 6,047 +14.77 +0.2%
|
YTD
+18.8%
+10.4%
+19.9%
+29.3%
+26.8%
| |
44,000 or 46,000 by 12/15/2024
17,025 or 18,000 by 12/15/2024
1,025 or 1,100 by 12/15/2024
20,000 or 18,500 by 12/15/2024
6,200 or 5,900 by 12/15/2024
| ||
Statistics updated on 12/18/2018. Rank updated on 7/26/19. As of 9/11/2020, I don't consider long islands a valid chart pattern.
For more information on this pattern, read Encyclopedia of Chart Patterns Second Edition, pictured on the right, pages 480 to 495. That chapter gives a complete review of the chart pattern, including tour, identification guidelines, focus on failures, performance statistics, trading tactics, and sample trade. Below is just a sliver of the information contained in the book.
This is not a new pattern, but one in which I coined the name to distinguish it from island reversals. With long islands, the gaps do not align. Long islands are a continuation pattern that perform best in bear markets.
Long Island Chart Pattern Example
|
The above numbers are based on over a thousand of perfect trades. See the glossary for definitions.
* Note that the measure rule for long islands uses half the island's height.
Characteristic | Discussion |
Price trend | Price can trend in any direction leading to the island. |
Shape | Non-aligned gaps separate a price island from the mainland. |
Gaps | Two gaps that setoff the long island do not share the same price. Those that do share the same price form island reversals. |
Wide gaps | Look for gaps at least $1 wide. This is an arbitrary number. |
Length | Look for islands shorter than 4 months. This is an arbitrary limit. |
Sequence | Islands tend to get shorter as they appear in a price trend. Thus, they can signal a trend change. |
Breakout | The day after the second gap is the breakout day. |
Trading Tactic | Explanation |
The Measure Rule
|
Measure rule | Compute the height from the highest peak (point A in the Measure Rule figure to the right) to lowest valley in the island (B) and divide by two then multiply it by the above 'percentage meeting price target.' Add the height to (upward breakouts) or subtract it from (downward breakouts) the closing price the day before the second gap. The result is the target price, C. | |
Short | Avoid short islands that appear well into the trend. They may signal a coming trend change. | |
Yearly middle | Avoid long islands with upward breakouts that appear in the middle of the yearly price range. They perform worst. | |
Height | Tall islands perform better than short ones. | |
Height, width | Long islands both tall and wide perform best for both breakout directions. |
The above figure shows examples of long island chart patterns. The first begins with a breakaway gap at point C and ends the next day with an exhaustion gap at D. The next long island begins at A and completes at B.
-- Thomas Bulkowski
Support this site! Clicking any of the books (below) takes you to
Amazon.com If you buy ANYTHING while there, they pay for the referral.
Legal notice for paid links: "As an Amazon Associate I earn from qualifying purchases."
My Stock Market Books
|
My Novels
|
Press any key...no, no, no, NOT THAT ONE!