A gentle lead-in, a speculative bump that balloons above trend, then a break of the lead-in trendline into a sharp reversal. Bulkowski's three-phase pattern, read through market psychology.
The Bump-and-Run Reversal (BARR) is the chart of speculation collapsing under its own weight.
It was defined by Thomas Bulkowski and codified in his Encyclopedia of Chart Patterns. He first noticed the shape while studying how real estate and artwork get over-valued.
What sets this pattern apart from other reversals is that it builds the overshoot itself into its structure. Where a head and shoulders or a double top traces an uptrend running out of strength, the bump-and-run traces something more specific: a normal advance that mutates into an abnormal blow-off, where only the blow-off collapses.
It unfolds in three phases.
How to Read
NASDAQ:AAPL
The classic version forms at a top (a sell signal). Invert it and you have a buy signal at a bottom. This article focuses on the top.
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