Читать книгу Encyclopedia of Chart Patterns - Thomas N. Bulkowski - Страница 105

Figure 8.1 shows an example of a broadening bottom. This particular one is called a five‐point reversal because there are five alternating touches, two minor lows (2 and 4) and three minor highs (1, 2, and 3). A five‐point reversal is also rare: In one study, I located only 5 in the 77 broadening bottoms I examined.

Price trends downward in late August and reaches a low 2 days before the chart pattern begins. That brief dip is what I call undershoot, where the stock is so excited as it drops, it dips below the beginning of the chart pattern within 2 weeks of its start. I ignore brief dips and overshoot—a brief rise within 2 weeks of the pattern's start—when determining the trend start (see the Glossary for details) leading to a chart pattern. Price overshooting or undershooting the formation start is common in many chart pattern types.

How does a broadening bottom differ from a broadening top? A broadening bottom has price trending downward into the start of the pattern; a broadening top has price trending up. The difference is arbitrary. I made the distinction thinking that the two might behave differently.

Figure 8.1 A broadening bottom, specifically a five‐point reversal, so‐called because of the five touchpoints: two minor lows (the even numbers) and three minor highs (the odd numbers).

If you ignore undershoot in this case, the broadening bottom appears at the bottom of the downtrend, hence the pattern is a broadening bottom and not a top.

This particular chart pattern shows a partial decline which correctly predicts an upward and immediate breakout. Price moves down from 26 to 24.50, reverses course, and shoots out the top. The stock reached a high of 38.50 just over a year later.