Checklist:

1. Big gainer with rising MAs, and a big drop to a key MA.
2. 3-5 big red candles straight down.
3. Finds support at a key MA. Usually the slower MA.
4. 2 very tight candles with higher lows. Total range should be <1/4 of the down range.
5. Opens above prior close and quickly breaks prior highs.

Notes:

• It’s the sudden violence of the pullback that creates this edge. Needs a big %drop.
• Typically bounces 3-5 candles back towards major highs.
• Ideal exit for first half of position is near prior highs.
• Works best on leading stocks that went parabolic and corrected with the market.

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Whip

Flags and gets tight.

Notes:

• The big drop creates a shakeout.
• Rides a key MA on the way up to past highs then consolidates along the next key MA.
• Box target using most recent leg up to past high.

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Checklist:

1. Big gainer with rising MAs, a big drop to a key MA and quick return right back to the highs.
2. 10-20 candles flagging near the past high.
3. Finds support at a key MA.
4. 3+ very tight candles with higher lows.

Vente

Symmetrical ABCD

Notes:

• the “CD” is typically longer than the “AB”
• Symmetrical version of many different flags.
• May have a third leg.

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A

B

D

C

Checklist:

1. Big gainer flagging at MAs.
2. 2 legs lower with 2 higher lows.
3. Finds support at or near a key MA.

Prairie Dog

Notes:

• Revisits past highs then collapses into the original breakout zone.
• Finds support at a key MA and tightness at the prior highs.
• Many wicks below the initial breakout candle, indicating longs getting stopped out.

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Checklist:

• Big gainer with rising MAs, a higher high, and a higher low.
• A flag break that quickly falls back into the past range.
• 2-5 tight candles along a key MA

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Breaks to new lows but puts in a higher low range.

Notes:

• The lower low creates a shakeout.
• Finds support at a key MA and higher low range.
• Typically beats the recent high and continues higher.

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Recent high

Past high

Checklist:

1. Big gainer with rising MAs, a higher high, a lower low, and a shorter term higher low pattern.
2. 3-15 candles down making a lower low.
3. Finds support at a key MA.
4. 7-20 candles higher low range with highs near midway retracement.

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Reset

Breaks to new lows and gets tight.

Notes:

• A tight flag breaks down then puts in 2 tight candles.
• Higher lows are being made keeping all the shorts in while more shorts pile on.
• Dip below the flag shakes out longs.
• The best ones run 3-5 days down creating asymmetrical mean reversion.
• Typically beats the recent high and continues higher.

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Recent high

Past high

Checklist:

• Big gainer flagging at MAs.
• 3-5 candles breaking below the flag.
• Wicks at or below a key MA.
• Opens above prior close and quickly breaks above the 3-5 shakeout candles.

Dip and Rip

Trips

Checklist:

• Finds support at a key MA.
• Short flags with 3 relatively tight candles grinding higher into upper part of the flag’s range.

only good on short patterns.

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High and Tight

Shakeout Tight

Stairstep

Waterfall

Notes:

• Look for a unrelenting drop to a longer term support level.
• Take 1-3 legs lower.
• Contrarian trade with lower highs and lower lows.
• Must have at least 2 tight candles. Best ones have 3-5 tight.

“h” Pattern

Checklist:

• Big gainer flagging at MAs.
• Higher low right at previous higher lows.

Notes:

• Revisits past lows and gets tight along a MA.
• Doesn't matter if new high is made.
• Messy by nature. Contrarian trade. When it looks like the trend will end, bet that it won’t.
• Best ones react off a rising MA.
• Many Episodic Pivot gap ups that fail and create this “h” pattern.