As of 04/22/2024
Indus: 38,240 +253.58 +0.7%
Trans: 15,224 +140.68 +0.9%
Utils: 883 +7.72 +0.9%
Nasdaq: 15,451 +169.30 +1.1%
S&P 500: 5,011 +43.37 +0.9%
|
YTD
+1.5%
-4.2%
+0.2%
+2.9%
+5.0%
|
 39,800 or 37,150 by 05/01/202416,200 or 15,000 by 05/01/2024885 or 850 by 05/01/202416,700 or 15,800 by 05/01/20245,250 or 5,025 by 05/01/2024 |
As of 04/22/2024
Indus: 38,240 +253.58 +0.7%
Trans: 15,224 +140.68 +0.9%
Utils: 883 +7.72 +0.9%
Nasdaq: 15,451 +169.30 +1.1%
S&P 500: 5,011 +43.37 +0.9%
|
YTD
+1.5%
-4.2%
+0.2%
+2.9%
+5.0%
| |
|
39,800 or 37,150 by 05/01/202416,200 or 15,000 by 05/01/2024885 or 850 by 05/01/202416,700 or 15,800 by 05/01/20245,250 or 5,025 by 05/01/2024 | ||
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Swing and Day Trading
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This page describes a study using double tops that showed the time to decline after a double top (CD in the figure below) is similar to the rise (AB) leading to the chart pattern.
When trying to measure how long it will take a stock to reach the launch price after confirmation (the CD move in the above figure), the time to rise from A to B is a good approximation.
I conducted a study to discover how long it takes price to return to the launch point after a confirmed double top. If you trade options, knowing how quickly price will hit a target is vital.
Referring to the above picture, I examined 1,333 double tops from 1/1990 to 6/2006 in 317 stocks and found 309 that looked like the picture. A flat base or congestion region preceded the double top. Then price moved up in a straight-line run (AB) to the double top. The double top appeared and confirmed when price closed below the valley between the two peaks (the red line at C). Then, price returned to the launch price (D).
I measured the time to rise from the trend start at A to the peak at B and compared it to the decline from confirmation, C, to the launch price, D.
The AB move took an average of 24 days. The CD move took an average of 19 days. This is perhaps not surprising because the distances are shorter, that is, CD is shorter than AB on a price basis. But, we are measuring time. I chose the confirmation point because that's when a twin peak becomes a true double top and that's the sell signal for a stock holding or the time you buy a put option.
When trying to measure how long it will take a stock to reach the launch price after confirmation (the CD move in the above figure), the time to rise from A to B is a good approximation.
This is not an easy pattern to identify in an emerging price trend nor is it plentiful. Here is what to look for.
The chart on the right shows an example of an Adam & Adam double top chart pattern. The flat base is not clear on this chart, but it lasted over a month. Since this stock has a wide daily trading range, the base also shows large price swings. In that regard, the chart is not a perfect example.
The rise from A (the launch point that begins the straight-line run up) to B (the top of the first peak in the double top) takes 16 days. Price confirms the double top chart pattern at C. The decline from C (the confirmation point) to D (the low closest to the launch price), is 15 days.
-- Thomas Bulkowski
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