Thomas N. Bulkowski - Encyclopedia of Chart Patterns

57 Chapter 56Figure 56.1 A rounding turn begins at point A and rounds over to end near th...Figure 56.2 Two rounding turns with the ends nearly at the same price. Both ...Figure 56.3 Overhead resistance blocks this rounding turn's upward breakout....Figure 56.4 A rounding top with a rising wedge. As described in the Sample T...

58 Chapter 57Figure 57.1 Three ascending scallops. Scallops resemble the letter J.Figure 57.2 Two ascending scallops, the first with an upward breakout and th...Figure 57.3 An ascending scallop failure in late June. Most scallops act as ...Figure 57.4 This ascending scallop led to a timely trade exit when the compa...Figure 57.5 Three consecutive ascending scallops. As described in the Sample...

59 Chapter 58Figure 58.1 After a long‐term uptrend, price retraces and forms the first sc...Figure 58.2 This scallop appears rounder if you connect the low prices inste...Figure 58.3 Notice how scallops become shorter and narrower as price rises....Figure 58.4 This is a valid pattern because it confirms, but the bearish tre...Figure 58.5 What is wrong with the highest scallop? The pattern never confir...Figure 58.6 As described in the Sample Trade, Robert bought the day after th...

60 Chapter 59Figure 59.1 Three descending scallops appear in a declining price trend. Not...Figure 59.2 Four consecutive descending scallops.Figure 59.3 Overhead resistance causes the July scallop to stall and eventua...Figure 59.4 This scallop fails to descend far after a downward breakout. Not...Figure 59.5 This trade ended in a loss.Figure 59.6 This descending scallop acts as a reversal of the upward price t...

61 Chapter 60Figure 60.1 A descending and inverted scallop appears as an upside‐down J.Figure 60.2 B and C mark the beginning and end of the scallop, not A or D.Figure 60.3 A pattern failure: Price at A should be well above B.Figure 60.4 As described in the Sample Trade, Rich shorted this stock and a ...

62 Chapter 61Figure 61.1 The three falling peaks chart pattern begins with the highest pe...Figure 61.2 Peaks A1, A2, and A3 form three falling peaks, as do B1, B2, and...Figure 61.3 Which of these patterns is a valid three falling peaks chart pat...Figure 61.4 After declining just 2% below point D, the stock rallies 58% fro...Figure 61.5 This busted three falling peaks pattern resulted in a sale just ...Figure 61.6 When price pierced trendline AB, it confirmed the three falling ...

63 Chapter 62Figure 62.1 This is the three peaks and domed house model.Figure 62.2 This three peaks and domed house has a few variations.Figure 62.3 The three peaks don't come close to sharing the same price in th...Figure 62.4 This is a more recent example of the three peaks and domed house...Figure 62.5 The absence of the test of point 10 suggests to use turn 4 or 6 ...

64 Chapter 63Figure 63.1 The three rising valleys chart pattern.Figure 63.2 Often, the three rising valleys chart pattern will appear in an ...Figure 63.3 Three rising valleys appear in a downward price trend. Price con...Figure 63.4 This three rising valleys chart pattern didn't work as expected....Figure 63.5 A three rising valleys pattern turned into a symmetrical triangl...

65 Chapter 64Figure 64.1 The horizontal top and up‐sloping trendline on the bottom mark t...Figure 64.2 Two views of an incorrectly identified ascending triangle. What ...Figure 64.3 This pattern is not a valid ascending triangle. There are not en...Figure 64.4 An excellent example of a correctly constructed ascending triang...Figure 64.5 There are two ways to set a price target for an ascending triang...Figure 64.6 Ascending triangle on the weekly time scale. The price rise gene...Figure 64.7 Trading an ascending triangle. As described in the Sample Trade,...

66 Chapter 65Figure 65.1 A nicely formed descending triangle with unusual volume pattern....Figure 65.2 The March triangle forms after a long climb beginning in late 19...Figure 65.3 This is not a descending triangle. There is too much whitespace ...Figure 65.4 This is an example of a busted pattern. A brief downward breakou...Figure 65.5 The measure rule: Take the difference between the two trendlines...Figure 65.6 As described in the Sample Trade, instead of opening a short pos...

67 Chapter 66Figure 66.1 A symmetrical triangle with a small price rise.Figure 66.2 A symmetrical triangle with an upward breakout. Price closes out...Figure 66.3 Two symmetrical triangles, one valid, the other invalid. The tri...Figure 66.4 An invalid symmetrical triangle. Price does not cross the patter...Figure 66.5 The symmetrical triangle on the left has an upward breakout that...Figure 66.6 Measure rule for symmetrical triangles. Use the measure rule to ...

68 Chapter 67Figure 67.1 This triple bottom forms the reversal portion of a Big W chart p...Figure 67.2 A triple bottom with three widely spaced, distinct troughs. A br...Figure 67.3 A triple bottom failure. This triple bottom fails to make a conv...Figure 67.4 Russell had high hopes for this triple bottom trade, but the sto...

69 Chapter 68Figure 68.1 A triple top has three peaks and a pullback usually follows. A h...Figure 68.2 This triple top shows three distinct widely spaced tops at nearl...Figure 68.3 Triple top reversal on the weekly scale. The triple top marks th...Figure 68.4 This is an example of a 5% failure where price fails to continue...Figure 68.5 A trade in a busted triple top didn't work as well as planned.Figure 68.6 Triple top with unconfirmed double bottom. As described in the S...

70 Chapter 69Figure 69.1 This is a good example of a V‐bottom that sees price climb.Figure 69.2 These two V‐bottoms appear in a downward trend. The left one fai...Figure 69.3 This V‐bottom fails to reach its potential.Figure 69.4 A V‐bottom trade made 35%, shown on the weekly scale.Figure 69.5 Dave bought this stock at the breakout and rode price higher.

71 Chapter 70Figure 70.1 This is what an ideal extended V‐bottom (ABC) looks like.Figure 70.2 This extended V‐bottom has a minor drop before the pattern compl...Figure 70.3 This extended V‐bottom doesn't see price rise much after the upw...Figure 70.4 This extended V‐bottom results in a two‐losing and one‐winning t...Figure 70.5 Jake makes 24% on this extended V‐bottom trade.

72 Chapter 71Figure 71.1 A V‐top appears at the bottom of a downtrend.Figure 71.2 This V‐top does not see price return to the launch price.Figure 71.3 This is what a typical failure of a V‐top looks like.Figure 71.4 Jim traded this busted V‐top and sold after a complex head‐and‐s...

73 Chapter 72Figure 72.1 Price forms an extended V‐top followed by a strong move lower at...Figure 72.2 Price in this extended V‐top sees the stock return to the launch...Figure 72.3 Price breaks out upward from this extended V‐top. Upward breakou...Figure 72.4 Stan uses lower highs to exit this extended V‐top trade.

74 Chapter 73Figure 73.1 A falling wedge bounded by two down‐sloping trendlines.Figure 73.2 A falling wedge with six trendline touches. Several alternating ...Figure 73.3 An example of a falling wedge 5% failure. Price does not move mo...Figure 73.4 The highest price in the wedge becomes the target price to which...Figure 73.5 This falling wedge trade made 51%.Figure 73.6 More than one‐fourth of falling wedges drop below the bottom tre...

75 Chapter 74Figure 74.1 A rising wedge with two up‐sloping trendlines. The volume trend ...Figure 74.2 Shown are two rising wedges with at least five touches of the tw...Figure 74.3 An example of a rising wedge 5% failure. Price fails to move dow...Figure 74.4 A downward breakout from the symmetrical triangle suggests price...Figure 74.5 This rising wedge predicts price will fall to 33.75, and it does...

76 Chapter 75Figure 75.1 This Wolfe wave sees price drop but did not reach its target whe...Figure 75.2 Price met the target in this example on time.Figure 75.3 Price failed to perform as expected in this Wolfe wave.Figure 75.4 Miles makes money from this swing trade.