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Pipe Bottoms


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Pipe Bottoms

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  #31 (permalink)
 madLyfe 
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hmm that might be tough to put into a scan.. there seems to be a whole lot of 'feel' to the pattern..

dont believe anything you hear and only half of what you see

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  #32 (permalink)
 DonStar 
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All trades that I have entered to date based on pipe bottom formations (knock on wood) continue to advance.

Right now, I'm not sure if it is from the strength of the pipe bottom formations or just that the market (as a whole) has been doing well and "all boats are rising."

GILD: Bought a $41 May Call @ $2.89 on 2 Jan 11. The Call option closed today @ $14.35. Sitting on a 397% gain. Moving the Stop up to just below this week's low of $48 ($47.90). This has been a good trade.

VLO: Bought @ $23.46 on Jan 23rd. Weekly close today @ $24.63. A gain of 4.99%.

OXM also bought on Jan 23rd @ $48.61. It closed this week @ $51.20. This represents a 5.33% gain.

I paid $6.01 for the 3rd stock I bought on Jan 23rd - CCRN. The stock closed this week @ $6.71 for a total gain of 11.65%.

Last week one formation confirmed. I bought it on Monday morning, Jan 30th at the market open. I was filled @ $24.51. This week PSSI closed @ $25.86, a 5.51% gain.

So, all open stock positions give me a 5.66% return on investment. I am not including the huge advance on the GILD option.

This week the Bulkowski website gave two pipe bottom formations: NBR and TUES.

NBR: Highest high of the two pipes = $18.23. The weekly close was $19.54. The close clearly is above the highest high of the two pipes and confirms the formation.

TUES: Highest high is $3.32. The weekly close of $3.76 confirms this formation also.

This week I want to look a little closer at TUES. It could just as well be NBR but TUES will do.

First: I am continuing my efforts to develop a scan for the two weekly pipes (need help on this please!). On his website, Bulkowski is giving us pipes that have already formed, we just don't know whether or not they will confirm because he gives us the stocks during the confirmation week.

What if the pipe bottom formation was identified (prior to confirmation) on a weekly chart and then the daily chart is used to confirm and enter the trade. The risk is that we confirm a trade before we know the weekly close (which is the stated/preferred method of confirmation). But it looks like the benefits could outweigh the risks.

Chart 1 is a weekly chart of the TUES pipe bottom formation as soon as it has completed development (at the end of the 2nd week).

Chart 2 is a daily chart of TUES. The pipe bottoms are still visible. Also visible is the confirmation line (see chart 1) which is the highest high of the two pipes (in this case $3.32).

What if, after identifying the two pipe bottoms and the confirmation line on the weekly chart, we switch to the daily chart and enter using the same rule as the weekly (a close above the highest high of the two pipes) only do so using the daily prices.

In the case of TUES, using this potential daily confirmation, the formation would have confirmed on Tuesday at a price of $3.40 after closing above the confirmation line at $3.32. In this scenario, we would have entered the trade at the market on the open Wednesday, Feb 1st. Just for purposes of discussion, let's say we fill at $3.50 (which is probably a pretty bad fill given the open was $3.41).

We still have Thursday and Friday's trading (which raised our position from $3.30 to $3.76. Keep in mind that as it stands right now, we are set to enter at market on Monday.

I haven't done any formal testing but just eyeballing this looks promising.

Just a few thoughts.

Any feedback?

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  #33 (permalink)
 kbit 
Aurora, Il USA
 
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DonStar View Post
All trades that I have entered to date based on pipe bottom formations (knock on wood) continue to advance.

Right now, I'm not sure if it is from the strength of the pipe bottom formations or just that the market (as a whole) has been doing well and "all boats are rising."

GILD: Bought a $41 May Call @ $2.89 on 2 Jan 11. The Call option closed today @ $14.35. Sitting on a 397% gain. Moving the Stop up to just below this week's low of $48 ($47.90). This has been a good trade.

VLO: Bought @ $23.46 on Jan 23rd. Weekly close today @ $24.63. A gain of 4.99%.

OXM also bought on Jan 23rd @ $48.61. It closed this week @ $51.20. This represents a 5.33% gain.

I paid $6.01 for the 3rd stock I bought on Jan 23rd - CCRN. The stock closed this week @ $6.71 for a total gain of 11.65%.

Last week one formation confirmed. I bought it on Monday morning, Jan 30th at the market open. I was filled @ $24.51. This week PSSI closed @ $25.86, a 5.51% gain.

So, all open stock positions give me a 5.66% return on investment. I am not including the huge advance on the GILD option.

This week the Bulkowski website gave two pipe bottom formations: NBR and TUES.

NBR: Highest high of the two pipes = $18.23. The weekly close was $19.54. The close clearly is above the highest high of the two pipes and confirms the formation.

TUES: Highest high is $3.32. The weekly close of $3.76 confirms this formation also.

This week I want to look a little closer at TUES. It could just as well be NBR but TUES will do.

First: I am continuing my efforts to develop a scan for the two weekly pipes (need help on this please!). On his website, Bulkowski is giving us pipes that have already formed, we just don't know whether or not they will confirm because he gives us the stocks during the confirmation week.

What if the pipe bottom formation was identified (prior to confirmation) on a weekly chart and then the daily chart is used to confirm and enter the trade. The risk is that we confirm a trade before we know the weekly close (which is the stated/preferred method of confirmation). But it looks like the benefits could outweigh the risks.

Chart 1 is a weekly chart of the TUES pipe bottom formation as soon as it has completed development (at the end of the 2nd week).

Chart 2 is a daily chart of TUES. The pipe bottoms are still visible. Also visible is the confirmation line (see chart 1) which is the highest high of the two pipes (in this case $3.32).

What if, after identifying the two pipe bottoms and the confirmation line on the weekly chart, we switch to the daily chart and enter using the same rule as the weekly (a close above the highest high of the two pipes) only do so using the daily prices.

In the case of TUES, using this potential daily confirmation, the formation would have confirmed on Tuesday at a price of $3.40 after closing above the confirmation line at $3.32. In this scenario, we would have entered the trade at the market on the open Wednesday, Feb 1st. Just for purposes of discussion, let's say we fill at $3.50 (which is probably a pretty bad fill given the open was $3.41).

We still have Thursday and Friday's trading (which raised our position from $3.30 to $3.76. Keep in mind that as it stands right now, we are set to enter at market on Monday.

I haven't done any formal testing but just eyeballing this looks promising.

Just a few thoughts.

Any feedback?

They definitely know more about these pipes than I do...if you hadn't told me that was a pipe bottom I never would have guessed...it's either that or they are stretching the definition and got lucky.

looks like it's going up though so can't argue with that.

In regards to going down to daily...it sounds like a good idea to me

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  #34 (permalink)
 DonStar 
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kbit View Post
They definitely know more about these pipes than I do...if you hadn't told me that was a pipe bottom I never would have guessed...it's either that or they are stretching the definition and got lucky.

looks like it's going up though so can't argue with that.

In regards to going down to daily...it sounds like a good idea to me

Thank you kbit.

I agree with you that some of the formations don't "stand out" the way I expect them to.

Like I said, I am working on a way to scan for these and select them myself. I'm guessing I will be more conservative when deciding whether or not to call some of these "Pipe Bottom" formations using my own definitions.

Thanks for your input.

Don

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  #35 (permalink)
 madLyfe 
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should call them Pipe Bombs and look for the opposite formation from the top of the chart..

dont believe anything you hear and only half of what you see

\_(ツ)_/

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  #36 (permalink)
 DonStar 
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Hi madLyfe: There actually are pipe top formations. I haven't much looked into them.

Here is a link to Bulkowski's website for them: https://thepatternsite.com/pipet.html

Maybe you could take them on and give us some feedback about them.

Don

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  #37 (permalink)
 DonStar 
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Hi All: I am remiss in updating last week's pipe bottoms market action. I am away at a conference this week and was travelling over the weekend. I don't have the time to go into every stock tonight but I will touch on GILD and then update the rest as I have time this week.

GILD shot out of the gate like a rocket. An almost perfect setup and a very nice 410% gain right now.

I have decided to use the low of the past week as my stop loss for GILD as well as all the others. Keep in mind that I am trying to develop a system with entry and exit rules.

I have the entry rules that Bulkowski gave and I am experimenting with them. But I am pretty much settled (at least for today) on placing the stop at the weekly low of the previous week.

Chart is attached.

Happy Valentines Day!

Don

p.s. madLyfe: Thanks for changing your profile picture!

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  #38 (permalink)
 GridKing 
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His pattern recognition software which is free is pretty interesting, I have tried it , it takes a bit to figure it out , but once you do, it dpes what it's supposed to do imo, I believe pipes are in the filters, have to use a quote downloader which he provides if I remember correctly

edit, well it was free years ago when I tried it, looks like he has changed to almost free for downloader , but seems like there is an alternative provided



https://thepatternsite.com/patternz.html

caution https://thepatternsite.com/Trouble.html#VU0


https://www.fidelity.com/static/dcle/learning-center/documents/PipeBottomReversals_11_2003.pdf

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  #39 (permalink)
 madLyfe 
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DonStar View Post
p.s. madLyfe: Thanks for changing your profile picture!

careful... i might change it back!

dont believe anything you hear and only half of what you see

\_(ツ)_/

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  #40 (permalink)
 Placebo 
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Hello DonStar. Good to see you here. This is the first time i've heard about pipe bottoms and it sounds quite nice. If i am understanding this correctly its two back to back bars similar to top reversals and bottom reversals ?

Cheers

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