Education & Information
Buy Signals
Bullish Shakeout Pattern
The bullish shakeout pattern is a form of a triple top. The first two columns of Xs stop at the same level, which is $37 in the chart above. The two columns of Os on the chart during this pattern actually break a double bottom. Similar to a bear trap pattern, if there is no follow through to the double bottom, it indicates the selling or supply is weak. The next three box reversal should be used to purchase the stock. The probabilities are high that the next column of Xs will follow through and break a triple top. In order for this pattern to be effectively used you want to make sure the major trend for the stock is up (see major trends) and the relative strength chart for the stock is on a buy signal (see relative strength charts).