As of 10/07/2024
Indus: 41,954 -398.51 -0.9%
Trans: 15,783 -31.37 -0.2%
Utils: 1,027 -24.05 -2.3%
Nasdaq: 17,924 -213.95 -1.2%
S&P 500: 5,696 -55.13 -1.0%
|
YTD
+11.3%
-0.7%
+16.5%
+19.4%
+19.4%
|
43,500 or 41,600 by 10/15/2024
16,800 or 15,700 by 10/15/2024
1,125 or 1,025 by 10/15/2024
19,000 or 17,600 by 10/15/2024
5,900 or 5,600 by 10/15/2024
|
As of 10/07/2024
Indus: 41,954 -398.51 -0.9%
Trans: 15,783 -31.37 -0.2%
Utils: 1,027 -24.05 -2.3%
Nasdaq: 17,924 -213.95 -1.2%
S&P 500: 5,696 -55.13 -1.0%
|
YTD
+11.3%
-0.7%
+16.5%
+19.4%
+19.4%
| |
43,500 or 41,600 by 10/15/2024
16,800 or 15,700 by 10/15/2024
1,125 or 1,025 by 10/15/2024
19,000 or 17,600 by 10/15/2024
5,900 or 5,600 by 10/15/2024
| ||
My book, Encyclopedia of Chart Patterns Second Edition, pictured on the left, has 63 chart and event patterns including performance statistics.
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Extended V tops and extended V bottoms are chart patterns that are easy to spot after they have completed. They appear just like their names suggest, V-shaped or inverted V-shaped price patterns on the chart.
Characteristic | Discussion |
Uptrend | Look for price to make a straight-line run upward with few or no pauses, often fitting inside a channel (two parallel trendlines). |
Reversal | Price at the top of the inverted V will form a one-day reversal, island reversal, or tail, usually on heavy volume. |
Trendline | After the reversal, price pierces an up-sloping trendline drawn along the price lows, confirming the trend change. |
Downtrend | Price trends down, usually at the mirror angle of the uptrend. If price climbed by 45 degrees, price will tumble following a 45 degree trend. |
Extension | The extended V top is a variation of the V top. After price reverses at the top, price forms a flag or pennant pattern – a sideways price move that often swings upward against the downward price trend. Once the flag completes, price resumes the decline. |
Trading an extended V top is easier than trading a regular V top. When price breaks out of the flag or pennant in the extended portion of the inverted V, take a position. For downward breakouts, expect price to approach the price level of the start of the inverted V on the left. It may not reach the exact bottom, so be prepared to exit early.
The above figure shows an example of an extended V top chart pattern. Price begins the advance to the summit in early June and peaks near July. A black candle signals a reversal followed by the extension in a small congestion region that slants upward. Once the stock pierces the bottom of this region, price tumbles, approximating the angle at which price climbed to the V top.
Many of the identification guidelines are similar to the extended V top.
Characteristic | Discussion |
Downtrend | Look for price to make a straight-line run downward with few or no pauses, often fitting inside a channel. |
Reversal | Price at the bottom of the V will form a one-day reversal, island reversal, or tail, usually on heavy volume, perhaps gapping upward. |
Trendline | After the reversal, price pierces a down-sloping trendline drawn along the price tops, confirming the trend change. |
Uptrend | Price trends up, usually at the mirror angle of the downtrend. If price dropped by 30 degrees, price will rise following a similar angle. |
Extension | The extended V bottom is a variation on the V bottom. After price reverses at the bottom, price forms a flag or pennant pattern – a sideways price move that often swings downward against the prevailing upward price trend. Once the flag completes, price resumes the rise. |
Trade an extended V bottom once price exits the flag or pennant. Expect price to approach the price level of the left side of the V (where the decline started).
The above figure shows an example of an extended V bottom chart pattern. The decline into the pattern is unusually steep, meaning it cannot last long, and it doesn't. Price rebounds in a V-shape and then levels out, forming the extension. The extension appears on the chart as a descending triangle -- a flat base with down-sloping top. The breakout from this congestion pattern is upward and that means a powerful move up, retracing much of the drop leading into the V bottom.
-- Thomas Bulkowski
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