Bearish crab

As of 04/18/2024

Indus: 37,775 +22.07 +0.1%

Trans: 14,947 -39.62 -0.3%

Utils: 860 +6.95 +0.8%

Nasdaq: 15,602 -81.87 -0.5%

S&P 500: 5,011 -11.09 -0.2%

YTD

+0.2%

-6.0%

-2.4%

+3.9%

+5.1%

Targets Overview: 04/12/2024

39,800 or 37,150 by 05/01/2024

16,200 or 15,000 by 05/01/2024

885 or 850 by 05/01/2024

16,700 or 15,800 by 05/01/2024

5,250 or 5,025 by 05/01/2024

Chart Pattern Indicator:

on 4/1/24

As of 04/18/2024

Indus: 37,775 +22.07 +0.1%

Trans: 14,947 -39.62 -0.3%

Utils: 860 +6.95 +0.8%

Nasdaq: 15,602 -81.87 -0.5%

S&P 500: 5,011 -11.09 -0.2%

YTD

+0.2%

-6.0%

-2.4%

+3.9%

+5.1%

Targets Overview: 04/12/2024

39,800 or 37,150 by 05/01/2024

16,200 or 15,000 by 05/01/2024

885 or 850 by 05/01/2024

16,700 or 15,800 by 05/01/2024

5,250 or 5,025 by 05/01/2024

Chart Pattern Indicator:

on 4/1/24

Bulkowski on the Bearish Crab Pattern®

Bearish Crab: Overview

This article describes my analysis of the bearish crab pattern as described by publicly available information and common sense rules to determine valid patterns. Additional rules may or may not improve performance. I tested the pattern using only the below identification guidelines.

The bearish crab loosely resembles a double bottom chart pattern except that the turns are located using Fibonacci ratios.

Bearish Crab: Important Bull Market Results

The above numbers are based on more than 1,350 perfect trades in bull markets. See the glossary for definitions.

Bearish Crab: Identification Guidelines

Characteristic	Discussion	Bearish Crab Ratios
Peaks/Valleys	The peaks and valleys in the pattern need not be consecutive. This is not a guideline, but an observation.
XAB	Price climbs to peak at X, the first point in the pattern. It drops from there to valley A and rises to peak B. The BA/XA retrace is one of the three ratios shown.
ABC	Turn ABC shows a BC/BA retrace of one of six Fibonacci ratios.
BCD	Extension DC/BC is one of three Fibonacci ratios.
DAX	Retrace DA/XA is 161.8%.

Because of the many ratios used, especially the 161.8% DA/XA retrace, the pattern is somewhat rare. I found 1,357 in a bull market.

Find five peaks/valleys (turns) where the ratio of one leg to another is one of the Fibonacci numbers listed in the figure. However, I used a 3 percentage point window on the last ratio (161.8% becomes 158.8% to 164.8%) to keep the sample count high.

Bearish Crab: Trading Tips

Price may dip after point D, in fact it's likely that it does so (87% do), but the drop usually doesn't amount to much (14% average which isn't bad for a swing trade). Twenty percent of chart patterns see price decline less than 5% below D.

You may have better luck with the pattern if overhead resistance matches or is near the XD peaks. Think of this as a ceiling which takes some pushing to break through.

For targeting, price drops to X 59% of the time, to A 18% of the time, to B 37% of the time, and it reaches the price of C 23% of the time.

Bearish Crab: Example

The figure above shows an example of a bearish crab pattern that isn't very bearish. The pattern begins at X and ends at D.

You might complain that X isn't a turning point, but it's a minor high, the highest peak in five price bars, so it's acceptable.

Notice that the stock dips after D, but then recovers and breaks out at E (the first close above the green line, setup by the high at D).

BA/XA = (121.57-113.57)/(127.80-113.57) or 56% (using the high at B). Using the low at B gives: (119.82-113.57)/(127.80-113.57) or 44%. This means the high-low range of B encompasses the 50% Fibonacci ratio.

BC/BA = (121.57-115.74)/(121.57-113.57) or 73% (using the low at C). Using the high at C gives (121.57-118.49)/(121.57-113.57) or 38.5%, which is almost exactly the 38.2% ratio.

DC/BC = (136.24-115.74)/(121.57-115.74) or 352%. Using the low at D gives (133.01-115.74)/(121.57-115.74) or 296%. The 352% to 296% range encompasses the target 314% value, so it qualifies.

DA/XA = (136.24-113.57)/(127.80-113.57) or 159% which is within three percentage points of 161.8%, so it's allowed.