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Use the measure rule to compute the target price. First, compute...

      13 Chapter 12Figure 12.1 An ascending broadening wedge has two up‐sloping trendlines that...Figure 12.2 The broadening feature of the wedge is clear in this chart. The ...Figure 12.3 A broadening formation fails to continue moving down, requiring ...Figure 12.4 An ascending broadening wedge that fails to continue moving down...Figure 12.5 This ascending broadening wedge trade led to an 87% gain.Figure 12.6 The measure rule as it applies to two ascending broadening wedge...

      14 Chapter 13Figure 13.1 This descending broadening wedge acts as a consolidation of the ...Figure 13.2 This descending broadening wedge acts as a reversal of the inter...Figure 13.3 This descending broadening wedge is a consolidation pattern in a...Figure 13.4 This wedge is a failure according to the 5% rule. Price fails to...Figure 13.5 As described in the Sample Trade, Mary used the wedge's height p...

      15 Chapter 14Figure 14.1 Upward momentum propels price higher during late 1993, then stal...Figure 14.2 Shown are various components of a bump‐and‐run reversal bottom. ...Figure 14.3 The bump height is less than twice the lead‐in height, a clue th...Figure 14.4 Consider waiting to buy the stock until after it breaks out upwa...Figure 14.5 This is a bump‐and‐run reversal that stopped rising within 15% o...Figure 14.6 This BARR bottom trade didn't work as expected.Figure 14.7 A bump‐and‐run reversal bottom failure in which John invested. H...Figure 14.8 A bump‐and‐run reversal bottom on a weekly scale. After the brea...

      16 Chapter 15Figure 15.1 Price moved higher along the trendline in the lead‐in phase, jum...Figure 15.2 A bump‐and‐run reversal shown on a weekly chart. The potential B...Figure 15.3 A bump‐and‐run reversal with a rounded bump occurs 76% of the ti...Figure 15.4 Shown is a bump‐and‐run reversal with a pointed‐looking first bu...Figure 15.5 Shown is a bump‐and‐run reversal trendline and parallel warning ...Figure 15.6 As described in the Sample Trade, Jenny raised her sell price as...

      17 Chapter 16Figure 16.1 This bearish butterfly is really bullish. Price continues the up...Figure 16.2 This bearish butterfly sees price drop from D and stall just bel...Figure 16.3 Price turned down at D but doesn't drop far when price continues...Figure 16.4 Susan decided to trade this bearish butterfly.

      18 Chapter 17Figure 17.1 This bullish butterfly leads to a fast recovery.Figure 17.2 This bullish butterfly is at XABCD and has a downward breakout, ...Figure 17.3 This bullish butterfly fails to see price turn higher after D.Figure 17.4 Mary traded this bullish butterfly for a quick 12% profit.

      19 Chapter 18Figure 18.1 A cloudbank lasts for years until the 2007–2009 bear market take...Figure 18.2 Two cloudbanks appear on this chart (A and D), with the first on...Figure 18.3 Price fails to recover after the bear market plunge.Figure 18.4 A 4‐month simple moving average provides a buy signal.Figure 18.5 An ugly double bottom provides a buy signal.

      20 Chapter 19Figure 19.1 This bearish crab sees price tumble after D.Figure 19.2 This well‐behaved crab has a downward breakout.Figure 19.3 This bearish crab fails to see price drop far after turn D.Figure 19.4 Sandy ignored the bearish crab and used a pennant to trade this ...

      21 Chapter 20Figure 20.1 This bullish crab forms an extended V‐bottom at turn D.Figure 20.2 This bullish crab shows a sustained uptrend after an upward brea...Figure 20.3 This bullish crab breaks out downward after climbing just 2% abo...Figure 20.4 Sam spotted this bullish crab but shorted the stock.

      22 Chapter 21Figure 21.1 A bump‐and‐run reversal leads to a cup‐with‐handle formation. No...Figure 21.2 A cup‐with‐handle pattern flanked by other cup‐with‐handle patte...Figure 21.3 A cup‐with‐handle pattern on a weekly scale. The failure at 10% ...Figure 21.4 Shown is a 5% failure of a cup‐with‐handle pattern. Although pri...Figure 21.5 Here is an example of the measure rule in practice on the weekly...

      23 Chapter 22Figure 22.1 An inverted cup‐with‐handle pattern appears along with dome‐shap...Figure 22.2 This inverted cup has a V‐shape and a handle that mirrors the cu...Figure 22.3 This inverted cup‐with‐handle has uneven rims and U‐shaped volum...Figure 22.4 This is not an inverted cup‐with‐handle because price fails to c...Figure 22.5 A large flat base before the start of the cup supported price an...Figure 22.6 As described in the Sample Trade, Samantha traded this inverted ...

      24 Chapter 23Figure 23.1 A diamond bottom reversal. Volume typically recedes through the ...Figure 23.2 A diamond bottom with receding volume trend. Price quickly recov...Figure 23.3 Support areas for diamond bottoms are near the base of the patte...Figure 23.4 A diamond bottom acts as a continuation of the downward price tr...Figure 23.5 Overhead resistance blocks the upward breakout from this diamond...Figure 23.6 Shown are four combinations of single‐ and two‐diagonal configur...Figure 23.7 A diamond top (left) and a diamond bottom (right), both single‐d...

      25 Chapter 24Figure 24.1 A good example of a diamond top. Notice that price quickly retur...Figure 24.2 This diamond top appeared when price was moving sideways.Figure 24.3 Support and resistance for the diamond appears at the top of the...Figure 24.4 This diamond top sees price continue higher.Figure 24.5 A valid diamond top breaks out downward, but price fails to desc...Figure 24.6 The predicted breakout direction for diagonal diamond patterns....Figure 24.7 Shown is a diamond top with dome‐shaped volume. To get a price t...

      26 Chapter 25Figure 25.1 This diving board pattern leads to a large upward move. Note: we...Figure 25.2 Note: weekly scale. The bottom of this board (A) is flat followe...Figure 25.3 Note: weekly scale. A number of potential diving board patterns ...Figure 25.4 Note: weekly scale. A diving board trade resulted in a small pro...Figure 25.5 Note: weekly scale. Rich made a trade using a diving board patte...

      27 Chapter 26Figure 26.1 An Adam & Adam double bottom with twin spikes, volume heavier on...Figure 26.2 An Adam & Adam double bottom with a throwback. Pattern AB (upper...Figure 26.3 Shown are two Adam & Adam double bottoms. The horizontal lines a...Figure 26.4 An Adam & Adam double bottom confirmed when price closed above t...Figure 26.5 Example of second type of failure—failing to wait for breakout c...Figure 26.6 Randy traded this Adam & Adam double bottom, buying at the confi...

      28 Chapter 27Figure 27.1 A tall one‐day downward price spike is the Adam bottom, and the ...Figure 27.2 This Adam & Eve double bottom appears as the corrective phase of...Figure 27.3 This double bottom happens after a downward price trend. The pat...Figure 27.4 Price confirms the breakout once it closes above the confirmatio...Figure 27.5 Example of a 5% failure. This type of failure occurs when price ...Figure 27.6 Double bottom trading dilemma. How do you trade this double bott...

      29 Chapter 28Figure 28.1 A double bottom occurs after a downward price trend. High volume...Figure 28.2 The Eve bottom appears rounded and wider than the narrow and V‐s...Figure 28.3 The top of the Eve bottom is wider than the Adam bottom. Eve app...Figure 28.4 An Eve & Adam double bottom with volume higher on the right bott...Figure 28.5 This is a 5% failure, where price fails to climb much above the ...Figure 28.6 As described in the Sample Trade, Willie bought early into this ...

      30 Chapter 29Figure 29.1 A broadening bottom leads to an Eve & Eve double bottom. The two...Figure 29.2 Points A and B do not depict a double bottom because there are l...Figure 29.3 These two Eve bottoms are wider and more rounded than the Adam b...Figure 29.4 Two minor lows compose the left Eve bottom, and the right bottom...Figure 29.5 Is this an Eve & Eve bottom or an Eve & Adam bottom, and why did...Figure 29.6 Price climbed just 9% after the breakout due to deteriorating fu...

      31 Chapter 30Figure 30.1 An Adam & Adam double top has twin peaks that look similar with ...Figure 30.2 An Adam & Adam double top confirms when price closes below the c...Figure 30.3 Another example of an Adam & Adam double top, but price does not...Figure 30.4 An Adam & Adam double top within a complex head‐and‐shoulders to...Figure 30.5 A double top pattern that suffers a 5% failure. Price fails to c...Figure 30.6 The predicted drop from a double top didn't turn into a buy sign...Figure 30.7 The two sell trendlines provide an opportunity to sell the stock...

      32 Chapter 31Figure 31.1 A double top

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