As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
|
 46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 |
As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
| |
|
46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 | ||
My book,
Getting Started in Chart Patterns, Second Edition
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Partial rises are looping chart patterns that appear at the end of broadening patterns and rectangles. They predict an immediate downward breakout.
New research (as of November 2013) says that when a partial rise does not occur, post-breakout performance improves. However, the performance results are similar.
| Characteristic | Discussion |
| Established | The rectangle or broadening chart pattern should be an established one, meaning that it should obey all of the identification guidelines for that pattern. Don’t look for a partial rise until you have a completed rectangle or broadening chart pattern. |
| Bottom trendline | Price should touch the bottom trendline and move up but not touch or come that close to the top trendline before heading back down. When price touches the lower trendline, it usually stages an immediate downward breakout. Sometimes, it may linger at the lower trendline before plunging through. If price rebounds, close out your position. |
| Breakout | Downward. This usually occurs immediately after the partial rise touches the lower trendline. |
| Pause | Price often pauses partway across a chart pattern so it may look like a partial rise is forming. Wait for price to head back down before shorting the stock. |
| Trading Tactic | Explanation |
| Price loop | If price bounces off the lower trendline and heads back up, then rounds over before coming close to the top trendline, then it may be a partial rise. Short once it’s clear that price is heading back toward the lower trendline. |
| Fibonacci | A trend reversal at the 50% or 62% Fibonacci retrace of the prior down move may signal a partial rise. |
| Pause | Price may pause at the lower trendline, perhaps slide along it before breaking out downward. |
| Cover | Cover your short if price bounces off the lower trendline and heads back up. |
| Breakout | Expect a downward breakout after a partial rise. |
The following table shows how often a partial rise correctly predicts a downward breakout in bull markets.
| Chart Patterns | Success Rate |
| Broadening bottoms | 67% |
| Broadening formations, right-angled and ascending | 74% |
| Broadening formations, right-angled and descending | 54% |
| Broadening tops | 61% |
| Broadening wedges, ascending | 74% |
| Broadening wedges, descending | 14% |
| Rectangle bottoms | 74% |
| Rectangle tops | 57% |
The above figure shows an example of a broadening bottom chart pattern. This broadening bottom is not my favorite example because price does not cross the pattern often enough. In other words, there is too much white space in the middle to end of the pattern. Nevertheless, price touches each trendline boundary often enough so the broadening pattern is established. Price in the partial rise attempts to reach the top trendline but fails. This partial rise is a gentle turn that leads to an immediate downward breakout.
This is based on new research using stock information from 3/1989 to 11/11/13. Not all stocks covered the entire period. I used broadening formations (all six types) and rectangles (tops and bottoms) in the research. Those patterns can show partial rises.
I compared the performance of 5,959 chart patterns with and without partial rises. This answers the question, "Does performance improve if a partial rise is absent?
The answer is yes, but not that you'd notice.
The 583 chart patterns with partial rises showed post breakout declines that averaged 13%. That compares to losses from 1,273 chart patterns that did not show a partial rise. Their losses averaged 14%. Since the numbers are so close, it's probably a statistical tie, even though the scale tilts to better performance if a partial rise does not occur.
-- Thomas Bulkowski
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