As of 07/23/2024
  Indus: 40,358 -57.35 -0.1%  
  Trans: 15,656 -244.42 -1.5%  
  Utils: 952 -5.51 -0.6%  
  Nasdaq: 17,997 -10.22 -0.1%  
  S&P 500: 5,556 -8.67 -0.2%  
YTD
 +7.1%  
-1.5%  
 +8.0%  
 +19.9%  
 +16.5%  
  Targets    Overview: 07/12/2024  
  Up arrow41,500 or 40,000 by 08/01/2024
  Up arrow16,500 or 15,600 by 08/01/2024
  Up arrow1,000 or 910 by 08/01/2024
  Up arrow19,200 or 17,800 by 08/01/2024
  Up arrow5,750 or 5,500 by 08/01/2024
As of 07/23/2024
  Indus: 40,358 -57.35 -0.1%  
  Trans: 15,656 -244.42 -1.5%  
  Utils: 952 -5.51 -0.6%  
  Nasdaq: 17,997 -10.22 -0.1%  
  S&P 500: 5,556 -8.67 -0.2%  
YTD
 +7.1%  
-1.5%  
 +8.0%  
 +19.9%  
 +16.5%  
  Targets    Overview: 07/12/2024  
  Up arrow41,500 or 40,000 by 08/01/2024
  Up arrow16,500 or 15,600 by 08/01/2024
  Up arrow1,000 or 910 by 08/01/2024
  Up arrow19,200 or 17,800 by 08/01/2024
  Up arrow5,750 or 5,500 by 08/01/2024

Bulkowski's Swing Rule Tutorial

Released 3/19/2020.

Swing Rule: Tutorial

Below is a slider tutorial for the swing rule. Captions appear below the pictures in red for guidance, so be sure to scroll down far enough to read them.

 

1 / 5
chart pattern
I learned about the swing rule from Sam Weinstein's book, "Stan Weinstein's Secrets for Profiting in Bull and Bear Markets." The rule is a way of predicting how far price will rise. For example, the swing down from A (the high is at 9.37) to B (the low is at 6.47) measures 9.37 - 6.47 or 2.90. How far will price rise above the high at A? The next slide provides the answer.
2 / 5
chart pattern
The answer is to add the height of swing AB to A. In this case, that's 2.90 + 9.37 or 12.27, which I show at C. The stock reaches the target about two weeks before COVID-19 virus takes the stock (and markets) down. Does the swing rule work for time? Let's explore that in the next slide.
3 / 5
chart pattern
Here's another swing from A to B. What is the price target? The high at A is 136.03 and the low at B is at 129.17 for a height of 6.86. Add the height (6.86) to the high at A (136.03) to get a target of 142.89. Using calendar dates (not price bars), the difference between A and B is 7 days. How long will it take to reach the target, on average? The next slide shows the answer.
4 / 5
chart pattern
My study of chart patterns shows that price drops about twice as fast as it rises. If the drop from A to B measures 7 days then the rise from B to A should take twice as long, or 14 days. The rise from A to C should take twice as long, or another 14 days for a total of 28 days. In this example, point C is 28 days after A, so it meets the time target exactly. The price target is 142.89, so it falls just short of that by 7 cents. The next slide provides statistics on how often the swing rule works.
5 / 5
chart pattern
The chart shows that the swing rule works about half the time. This article explains the swing rule in more detail.

See Also

 
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