As of 09/22/2021
  Indus: 34,258 +338.48 +1.0%  
  Trans: 14,001 -67.19 -0.5%  
  Utils: 898 -0.44 0.0%  
  Nasdaq: 14,897 +150.45 +1.0%  
  S&P 500: 4,396 +41.45 +1.0%  
YTD
 +11.9%  
 +11.9%  
 +3.9%  
 +15.6%  
 +17.0%  
  Targets    Overview: 09/15/2021  
  Up arrow35,600 or 33,800 by 10/01/2021
  Up arrow15,400 or 14,000 by 10/01/2021
  Up arrow930 or 890 by 10/01/2021
  Up arrow15,600 or 14,700 by 10/01/2021
  Up arrow4,650 or 4,350 by 10/01/2021
CPI (updated daily): Arrows on 9/22/21
As of 09/22/2021
  Indus: 34,258 +338.48 +1.0%  
  Trans: 14,001 -67.19 -0.5%  
  Utils: 898 -0.44 0.0%  
  Nasdaq: 14,897 +150.45 +1.0%  
  S&P 500: 4,396 +41.45 +1.0%  
YTD
 +11.9%  
 +11.9%  
 +3.9%  
 +15.6%  
 +17.0%  
  Targets    Overview: 09/15/2021  
  Up arrow35,600 or 33,800 by 10/01/2021
  Up arrow15,400 or 14,000 by 10/01/2021
  Up arrow930 or 890 by 10/01/2021
  Up arrow15,600 or 14,700 by 10/01/2021
  Up arrow4,650 or 4,350 by 10/01/2021
CPI (updated daily): Arrows on 9/22/21

Bulkowski's Congestion Quiz

 

This article is a quiz designed to test your knowledge of breakouts.

Two ascending triangles on the daily scale

Look at the chart of two fictitious ascending triangles on the daily scale. The triangle is outlined in blue with a horizontal top trendline and an up-sloping bottom trendline. Both A and B show upward breakouts but there is a difference between the two charts.

Which setup (A or B) represents the best trading opportunity?

The difference, if you didn't find it, is in the five days leading to the breakout. In A, price makes a straight-line run but in B, price runs into a congestion area in the five days before the breakout.

I proved in a study that the differences between trading a chart pattern with a straight-line run (A) and a congestion area (B) is not huge. In the straight-line run, on average, the rise after the breakout will be further, but the risk of failure increases, too. Throwbacks will occur more often and that is usually a bad thing.

When looking for chart patterns, trade those with a congestion area forming just before the breakout. If a straight-line run appears, then consider waiting for a throwback to occur and complete. Once price starts moving up again, then enter the trade.

-- Thomas Bulkowski

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See Also

 

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.

My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Encyclopedia of Candlestick Charts Trading Classic Chart Patterns

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