As of 10/11/2019
  Indus: 26,817 +319.92 +1.2%  
  Trans: 10,292 +224.65 +2.2%  
  Utils: 867 -5.54 -0.6%  
  Nasdaq: 8,057 +106.26 +1.3%  
  S&P 500: 2,970 +32.14 +1.1%  
YTD
 +15.0%  
 +12.2%  
 +21.6%  
 +21.4%  
 +18.5%  
  Targets    Overview: 09/30/2019  
  Up arrow27,600 or 25,600 by 10/15/2019
  Up arrow11,100 or 9,700 by 10/15/2019
  Up arrow900 or 850 by 10/15/2019
  Up arrow8,300 or 7,700 by 10/15/2019
  Down arrow2,825 or 3,050 by 10/15/2019
As of 10/11/2019
  Indus: 26,817 +319.92 +1.2%  
  Trans: 10,292 +224.65 +2.2%  
  Utils: 867 -5.54 -0.6%  
  Nasdaq: 8,057 +106.26 +1.3%  
  S&P 500: 2,970 +32.14 +1.1%  
YTD
 +15.0%  
 +12.2%  
 +21.6%  
 +21.4%  
 +18.5%  
  Targets    Overview: 09/30/2019  
  Up arrow27,600 or 25,600 by 10/15/2019
  Up arrow11,100 or 9,700 by 10/15/2019
  Up arrow900 or 850 by 10/15/2019
  Up arrow8,300 or 7,700 by 10/15/2019
  Down arrow2,825 or 3,050 by 10/15/2019

Bulkowski's Pipe Tops

 

Statistics updated on 12/3/2018.

For more information on this pattern, read Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right, pages 550 to 562.

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

-- Tom Bulkowski

$ $ $

Pipe tops are good performers in both bull and (especially) bear markets. Discovered by Thomas Bulkowski in 1998.

Pipe top chart pattern
Pipe Top Pattern

Pipe Top: Important Bull Market Results

Overall rank: 4 out of 53
Break even failure rate: 13%
Average decline: 19%
Pullback rate: 28%
Percentage meeting price target: 54%

The above numbers are based on more than 4,000 perfect trades. See the glossary for definitions.

Pipe Top: Identification Guidelines

CharacteristicDiscussion
Weekly chartPipes appear on the daily scale but the ones on the weekly charts perform better. Use the weekly chart.
Price trendUsually upward leading to the pattern.
ShapeTwin and adjacent upward spikes. On a bar chart, the two price bars look like spikes. On a candlestick chart, the candles can be any shape (from doji to Marubozu). In other words, don't let the term spike mislead you.
SpikesThe spikes should be longer than most others in the past year, but be flexible. They should tower over the surrounding price landscape.
OverlapThe spikes should have a large price overlap.
VariationThe price variation between tops is usually small but can vary up to $1 or more for high price stocks. The average difference is 20 cents.
VolumeThe right spike has lower volume when compared to the left spike.
ObviousThe pipe should stand-alone and be obvious on the chart.
RetraceThe best performing pipes appear at the top of a retrace in a prolonged downtrend.
ConfirmationThe pattern confirms when price closes below the lowest price in the pattern.

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Pipe Top: Trading Tips

Trading TacticExplanation Pipe top measure rule
The Measure Rule
Measure ruleCompute the height of the pattern from the highest high (point B in the Measure Rule figure to the right) to the lowest low (A) then multiply it by the above 'percentage meeting price target.' Subtract the difference from the lowest price in the pattern (A) to get a price target (C).
DowntrendsThe best performing pipes occur during downtrends. Price bounces upward, forms a pipe, and then continues the decline.
TrendsAvoid pipes that appear after a long downtrend. The pipe may signal the end of the trend.
Yearly lowPipes with breakouts within a third of the yearly low show the best performance.
PullbacksPullbacks hurt performance.

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Pipe Top: Example

Pipe top chart pattern example

The above figure shows an example of a pipe top in the midst of a downward price trend. This is an example of the preferred setup, where a pipe top occurs when price is trending downward. The chart shows that price dropped from a low of about 8 to below 6.

-- 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:      New                  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 Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

Copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved.
Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.
Some pattern names are registered trademarks of their respective owners.

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