Sunday, July 28, 2013

Finding the blow off top pattern

I believe the blow off top is the most reliable pattern of all stock chart patterns. The difficulty is at identifying it correctly. The details of doing this will be presented in a number of small lectures later on (because I'm on vacation and don't have access to my laptop where I've written it down). So for now lets focus on actually finding charts with this pattern at all. I have not yet found a screening tool that can filter out blow off top (BOT) patterns and nothing else. The BOT is also a relatively rare pattern, at least when it is close to ideal. Previously I relied on 52 week high filters but that did not produce very good result. Now I check the site All time high stocks and use their filter. It is still not close to perfect because it shows all time high stocks regerdless of pattern but there is a long term chart displayed for every stock where it is easy to see if the stock has a BOT. Maybe in the future I will write my own screener for this pattern.

It should be noted that all time high stocks actually are bullish if they do not display a BOT, that is why it is so important to find ideal BOT patterns.

Besides this screener I check most leveraged ETFs concistently. These ETFs ,because of their leveraged nature, have a high tendency for BOTs. The BOTs found in leveraged ETFs are in general more short term than in individual stocks but the reliability is just as good.

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