Is there a technical term for this?

[bowman]

I see this hapenning quite often and am wondering if there is a term to describe this pattern - or if indeed you can call it a pattern.

The stock trends down, and then just prior to the breakout there is a final dip on increased volume.

Typically what is usually hapening is an insto sells down the stock steadily and then dumps the last bit into the market, creating the dip.
With the selling pressure gone, the stock rallies and breaks out.

Does anyone know if there is a technical term for this?

 

[skc]

I see this hapenning quite often and am wondering if there is a term to describe this pattern - or if indeed you can call it a pattern.

The stock trends down, and then just prior to the breakout there is a final dip on increased volume.

Typically what is usually hapening is an insto sells down the stock steadily and then dumps the last bit into the market, creating the dip.
With the selling pressure gone, the stock rallies and breaks out.

Does anyone know if there is a technical term for this?

Blow-off low?

The 2 candle pattern after the one you highlighted is called something like piercing pattern (opposite is dark cloud cover).

 

[bowman]

Blow-off low?

The 2 candle pattern after the one you highlighted is called something like piercing pattern (opposite is dark cloud cover).

Thanks skc.

You can get some pretty explosive moves from these situations - MAH being a recent notable one with the low in July.

I must brush up on my candles - that's a bit of a weak spot with me, apart from the obvious single line ones.

 

[skc]

Thanks skc.

You can get some pretty explosive moves from these situations - MAH being a recent notable one with the low in July.

I must brush up on my candles - that's a bit of a weak spot with me, apart from the obvious single line ones.

Yes MAH was a good one. I tried to trade that and got my v. tight stop hit

KAR had a great one back in May... and it was spectular after that.

 

[swm79]

could be an aroon cross too... depends on aroon up and aroon down just before the bomb went off

i havent checked it, so i could be very wrong

 

[swm79]

i know i know... stupid of me to say it without checking... but def looks like the pattern of one... would be interesting to see if it was.

 

[chrislp]

I see it as being stopping volume. Previous support to the left & there could have been some stops down there but no follow through in selling the next couple of days.

That's the way i see it.

 

[white_crane]

I noticed this pattern very early when I started out in trading. My two best trades during this time (BHP & RIO last year) were made using this pattern. As the price falls, the volume ramps up. I bought on high volume after a close above the open. I don't know the term for this pattern though.

 

[Nick Radge]

Yep, that's known as 'stopping volume'. Its sometimes associated with very tight bars as well. Nice example.

 

[tech/a]

These setups can be described technically by a number of terms.
Stopping volume is a 2 bar setup.
Strength coming in can be a one bar setup.
Climatic action is generally a 2 bar set up.
Can also be seen as a shake out.

Generally though there is a high volume long tail bar closing above 50% of the range followed by a lower volume up bar with decent range.
Can also be a very squat bar as Nick says with ultra high volume followed by an up bar with markedly less volume.

 

[bowman]

Thanks for all the feedback and examples guys.

This pattern seems to often be a turning point in a downtrend, although in a strong downtrend it may occur more than once before the uptrend is resumed.

For me, it's been a good source of short term trades and sometimes a lot more and now I can give it a name.

I'll see if I can find some before they turn and post them in the 'Fib retrace and other pullbacks' thread.

Cheers.