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 Throwbacks

 

My book, Visual Guide to Chart PatternsVisual Guide to Chart Patterns book., pictured on the left, has an entire chapter dedicated to throwbacks and pullbacks, starting on page 47.

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

$ $ $

After an upward the breakout from a chart pattern, price lifts off then falters and returns to the launch price. This curling price behavior is called a throwback if it occurs within a month of the breakout.

 

Throwback

Throwback Chart Pattern

Throwback: Identification Guidelines

CharacteristicDiscussion
ShapeThrowbacks can assume any shape.
TimeBy convention, a throwback occurs within 30 calendar days after the breakout.
White spaceThe stock must not slide along the breakout price but zoom up, curl around and return to, or come close to, the breakout price or chart pattern trendline (boundary).
VolumeHigh volume breakouts have a tendency to throwback more often than low volume ones.

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Throwback: Trading Tips

Trading TacticExplanation Another throwback example
Expect oneExpect a throwback will occur.
Overhead resistanceThis is the chief cause of a throwback. Price bumps up against overhead resistance and then price tumbles. Be sure to look for prior peaks and valleys, horizontal consolidation regions (HCRs), and other signs of overhead resistance before trading.
Throwback rateSince year 2000, 58% of 10,305 chart patterns with upward breakouts had throwbacks.
TimePrice climbs for 6 days after the breakout, on average, before beginning the return journey.
Loop timeIt takes an average of 10 days, total, for price to complete the return trip back to the breakout, as measured from the breakout day to the day price returns.
HeightThe average height from the breakout price to the top of the throwback is 8%, but a frequency distribution shows that most rise 4% to 10%.
VolumeA high volume (above the 30-day average) breakout throws back 70% of the time, on average.
Price dropAfter the stock returns to the breakout price, 35% continue dropping below the chart pattern. That means 65% of the time price recovers.

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For additional information on throwbacks and how you can improve profits by placing a tight stop, see the study on Money management.

Throwback Measure Rule

Throwback measure rule

The measure rule for throwbacks is similar to the measured move up chart pattern. Using the figure to the left as a reference, find where the upward price trend begins (the swing low at point A) and subtract the price from where the trend ends at B (the swing high). Add the difference to the throwback low at C to get a price target.

Throwback Price Trend

Price trend

The price trend leading to the breakout can help determine whether price will throwback or not. If price has more than 3 consecutively higher closes ending the day before the breakout, then expect price to have a lower probability of throwing back. See the study, Price Trends Leading to the Breakout.

Throwback Power Move

During a throwback attempt, if price remains above the breakout price, then expect a more powerful move than if price drops below the breakout. I measured this in 19 chart pattern types from July 1991 to March 2005 and found 10,348 chart patterns. Of that group, 3,167 had throwbacks. When price remained equal to or above the breakout price, the rise averaged 40% (400 samples qualified). When price dropped below the breakout, the resulting rise averaged just 29% (2,767 samples). The numbers measure the rise from the breakout to the ultimate high, which is the highest high before price tumbles by at least 20%.

-- Thomas Bulkowski

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Other Throwback Examples

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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