Читать книгу Encyclopedia of Chart Patterns - Thomas N. Bulkowski - Страница 29

Figure 1.5 shows another setup but one you should avoid (at least from the bullish side). The setup begins with price making a strong push higher, often in a straight‐line run (but be flexible as in this example). I show that upward move at A and then B. The uptrend lasts several months and takes price from about 9 to 13 (which means, a good rise).

Price moves horizontally at C as if trying to catch its breath (ignore the downward February spike at C). The horizontal move should be proportional to the AB move. If AB shows a breathtaking rise, then expect C to be a long horizontal move while the bulls and bears regroup. In this example, AB is about 4 months long and C is 6 months long.

Figure 1.5 This U‐shaped pattern delivers a failure.

After the topping pattern (C), price forms a chart pattern just below the base of the peak. I show that pattern at DE (a double bottom). The double bottom confirms at F when the doji (hard to see) closes above the top of the peak between valley's D and E. Price climbs only to G before reversing.

After G, the stock drops all the way to H. Traders expecting the double bottom to deliver profits to their wallet find holes in their pockets and the money gone.

I see this setup a lot. Price moves up, goes horizontal, and then a chart pattern appears (which can be any bullish pattern, like head‐and‐shoulders bottom, double bottom, or triple bottom). The pattern confirms as valid and price rises some before reversing and heading lower. The pattern busts its upward breakout, handing bulls a loss.

Just recognizing the double bottom (DE) as a tradable pattern isn't enough. If you research the setup by looking at other charts, you'll see how this setup can lead to a failure of a chart pattern.

This (the double bottom, or head‐and‐shoulders, or any bullish pattern at the end of the horizontal top) is a setup you'll want to avoid.