chart_school:chart_analysis:pnf_alerts

P&F Pattern Alerts

Whenever common chart patterns appear on the right side of our Point & Figure charts, we will display an “alert” with the name of that pattern near the top of the chart. Members can also create custom scans that find stocks with these patterns. Here is a list of the various kinds of P&F chart patterns that we currently detect.

Buy and Sell signals are very simple patterns that should be confirmed before placing a trade. The P&F Buy signal is used when calculating the various Bullish Percent indices.

P & F Buy

P & F Buy
O
O X ← buy signal
O XO
OX XO
OXOXO
OXOXO
OXO O← not a sell signal yet
O

When the last signal on the chart was a buy signal, that is, the last breakout was a column of Xs going higher than the previous column of Xs and no sell signal (no column of Os breaking below the previous column of Os) has happened since the buy signal.

P & F Sell

P & F Sell
X
XO
XOX X← not a buy signal yet
XOXOX
XOXOX
XO OX
X O ← sell signal

When the last signal on the chart was a sell signal, that is, the last breakout was a column of Os going lower than the previous column of Os and no buy signal (no column of Xs breaking above the previous column of Xs) has happened since the sell signal.


Double tops and bottoms are the simplest point and figure patterns to identify and are the building blocks of all other patterns.

Double Top Breakout

Double Top Breakout
X← double top breakout
X X← double top
OXOX
OXOX
OXOX
OX
O

For a double top, prices rise to a certain level and then retreat because the supply outstripped the demand at that level. If prices rise again to the level at which they retraced before, it is called a double top. If prices continue to carry through that level, a double top breakout is recognized by our alert system. The double top breakout alert implies that the buyers are now creating more demand than there is supply at the level of the double top and we have a breakout.

Double Bottom Breakdown

Double Bottom Breakdown
X
XO
XOX
XOXO
XOXO
O O← double bottom
O← double bottom breakdown

A double bottom is similar, but in reverse. Prices fall to a certain level and then reverse because the demand outstripped the supply at that level. If prices fall again to the level at which they stopped before, it is called a double bottom. If prices continue to fall through that level, a double bottom breakdown is recognized by our alert system. The double bottom breakdown implies that the buyers who were supporting the price are no longer able to create demand that is more than the supply, and prices are breaking down.

Triple Top Breakout

Triple Top Breakout
X← triple top breakout
X X X← triple top
OXOXOX
OXOXOX
OXOXO
OXO
OX
O

A triple top breakout is similar to a double top breakout except that the price at which the breakout occurred is a price that the chart retraced from two times before. This implies that the price level is a more significant area of resistance (area where sellers are willing to sell the stock and create supply that outstrips demand) than what is seen on a double top. The breakout above this level implies that the buyers are now creating more demand than there is supply and therefore the prices are breaking out.

Triple Bottom Breakdown

Triple Bottom Breakdown
X
XO
XOX
XOXOX
XOXOXO
XOXOXO
O O O←- triple bottom
O← triple bottom breakdown

A triple bottom breakdown is similar to a double bottom breakdown except that the price at which the breakdown occurred is a price that the chart retraced from two times before. This implies that the price level is a more significant area of support (area where buyers are willing to buy the stock and create demand that outstrips supply) than what is seen on a double bottom. The breakdown below this level implies that the sellers are now creating more supply than there is demand and therefore the prices are breaking down.

Quadruple Top Breakout

Quadruple Top Breakout
X← quadruple top breakout
X X X X← quadruple top
OXOXOXOX
OXOXOXOX
OXOXOXO
OXOXO
OXO
O

A quadruple top breakout is similar to a triple top breakout, except that the prices break out after retracing from the same level three times. The fourth time the demand was able to outstrip the supply at the price level, and prices broke out with a quadruple top breakout.

Quadruple Bottom Breakdown

Quadruple Bottom Breakdown
X
XOX
XOXOX
XOXOXOX
XOXOXOXO
XOXOXOXO
O O O O← quadruple bottom
O← quadruple bottom breakdown

A quadruple bottom breakdown is similar to a triple bottom breakdown, except that the prices break down after retracing from the same level three times. The fourth time the supply was able to outstrip the demand at the price level, and prices broke down with a quadruple bottom breakdown.

Ascending Triple Top Breakout

Ascending Triple Top Breakout
X← ascending triple top breakout
double top → X X
X XOX
OXOXOX
OXOXO
OXO
OX
O

A double top followed by another double top, or three tops, each higher than the previous is recognized as an ascending triple top breakout. The idea is that demand is continuing to outstrip supply on an ongoing basis.

Descending Triple Bottom Breakdown

Descending Triple Bottom Breakdown
X
XO
XOX
XOXO
XOXOX
O OXO
OXO
double bottom –> O O
O← descending triple bottom breakdown

A double bottom followed by another double bottom, or three bottoms, each lower than the previous is recognized as an descending triple bottom breakdown. The idea is that supply is continuing to outstrip demand on an ongoing basis.

Bullish Catapult Breakout

Bullish Catapult Breakout
X← bullish catapult breakout
triple top breakout → X X
X X XOX
OXOXOXOX
OXOXOXO
OXOXO

A triple top breakout followed by a double top breakout is recognized as a bullish catapult breakout. The implication is that there was supply at the triple top level that was keeping prices from going up, but the triple top breakout took some of that supply away. Prices then retraced, allowing more buyers to create demand which continued to power the up move in prices.

Bearish Catapult Breakdown

Bearish Catapult Breakdown
X X X
X O X O X O X
X O X O X O X O
O O O X O
triple bottom breakdown → O O
O ← bearish catapult breakdown

A triple bottom breakdown followed by a double bottom breakdown is recognized as a bearish catapult breakdown. The implication is that there was demand at the triple bottom level that was keeping prices from falling, but the triple bottom breakdown took some of that demand away. Prices then reversed up, allowing more sellers to create supply which continued the selling which broke below the double bottom level creating the bearish catapult breakdown.


Bullish Signal Reversed

Bullish Signal Reversed
X
X XO
X XOXO
X XOXOXO
XOXOXO O
XOXO O← bullish signal reversed
XO
X
X

This pattern is a series of rising tops and bottoms that finally soaks up all demand and the double bottom breakdown at the end signals that now supply is outstripping demand.

Bearish Signal Reversed

Bearish Signal Reversed
X
XOX
XOXOX X← bearish signal reversed
XOXOXOX X
XO OXOXOX
X O OXOX
X O OX
X O
X
X

This pattern is a series of falling tops and bottoms that finally soaks up all the supply and the double top breakout at the end signals that now demand is outstripping supply.

Bullish Triangle Breakout

Bullish Triangle Breakout
X
XO
XOX X← bullish triangle breakout
XOXOX X
XOXOXOX
XOXOXOX
XOXOXOX
XOXOXO
XOXO
XO
X

Bearish Triangle Breakdown

Bearish Triangle Breakdown
X
XO
XOX
XOXOX
XOXOXOX
XOXOXOXO
XOXOXOXO
XOXOXO O
XOXO O←- bearish triangle breakdown
XO
X

Triangles are formed when both the supply and demand for the stock are drying up. Prices are unable to rise but neither are they able to fall, there is an equilibrium between the buying and selling as is seen by the rising bottoms and the falling tops that form the triangle. This stalemate between buyers and sellers is finally resolved by a double top breakout in the case of a bullish triangle breakout, or by a double bottom breakdown in the case of a bearish triangle breakdown.

Long Tail Down Reversal

Long Tail Down Reversal
X X
XOXO
XOXOX
XOXOXO
XOXOXO
X O
O
O
O
O
O
O
O
O
O
O
O
O
O
OX← long tail down reversal
OX
OX
O ← long tail down

This pattern is recognized when the prices drop 20 boxes or more. After such a steep decline, the first reversal provides a good trading opportunity, but the steep drop should give the buyer pause.

Bull Trap

Bull Trap
X ← triple top breakout
X X XO
XOXOXO
XOXOXO← bull trap (quick reversal)
XO O
X

A bull trap is a triple top breakout followed by a reversal after only one box is made in the triple top breakout. The breakout is possibly due to buy stops being hit just above the resistance level, and the quick reversal suggests lower prices ahead.

Bear Trap

Bear Trap
X
XO
XOX
XOXO
XOXOX
XOXOXOX← bear trap (quick reversal)
XOXOXOX
XO O OX
O ← triple bottom breakdown

A bear trap is a triple bottom breakdown followed by a reversal after only one box is made in the triple bottom breakdown. The breakdown is possibly due to stop loss orders or short orders being hit just below the support level, and the quick reversal suggests higher prices ahead.

Spread Triple Top

Spread Triple Top
X← spread triple top breakout
X X X← spread triple top
XOXOX X
XOXOXOX
XOXOXOX
XOXOXO
XOXO
XO
X

A spread triple top breakout is similar to a triple top breakout except that the price at which the breakout occurred is a price that the chart retraced from two times before in the recent past. The two times do not have to be immediately preceding the current column. This alert implies that the price level is a significant area of resistance (area where sellers are willing to sell the stock and create supply that outstrips demand). The breakout above this level implies that the buyers are now creating more demand than there is supply and therefore the prices are breaking out.

Spread Triple Bottom Breakdown

Spread Triple Bottom Breakdown
O
OX
OXO
OXOX X
OXOXOX
OXOXOXO
OXOXO O
O O O← spread triple bottom
O← spread triple bottom breakdown

A spread triple bottom breakdown is similar to a triple bottom breakdown except that the price at which the breakdown occurred is a price that the chart retraced from two times before in the recent past. This implies that the price level is a significant area of support (area where buyers are willing to buy the stock and create demand that outstrips supply). The breakdown below this level implies that the sellers are now creating more supply than there is demand and therefore the prices are breaking down.

High Pole

High Pole
X
XO
XO
XO
X XO
XOXO← high pole warning (more than 50% reversal)
XOX
XOX
XO
X

The high pole warning is given when a chart rises above a previous high by at least 3 boxes but then reverses to give back at least 50 percent of the rise. The reversal implies that the demand that was making the prices rise has given way to supply pressure. The pattern is a warning that lower prices could be seen in the future.

Low Pole Reversal

Low Pole Reversal
O
O
OX
OXO
OXO
O OX ← low pole warning (more than 50% reversal)
OX?
OX?
OX?← the next reversal down for entry
O ?
?← stop loss level

The low pole reversal is seen when a chart falls below a previous low by at least 3 boxes but then reverses to rise by at least 50 percent of the fall. The reversal implies that the supply that was making the prices fall has been absorbed and demand is taking over. The pattern is an alert that higher prices could be seen in the future. The ideal buy point would be on another reversal back down to be closer to the stop loss point. This would also set up a double top breakout if the prices reverse up and break over the current column's high.