• : May 30, 2021
  • : Prashant Shah
 
Strike-back Pattern
 
See below image.



Price went below its previous swing low. It is a bearish breakout.

Price going below previous low is a double bottom sell pattern in P&F charts.



Pattern is bearish. People who were looking at previous low as support are in trouble. Their stops have got hit; bears are dominating.

Imagine, bulls strike back and take price above previous low. See below image.



Price above bearish breakout level. Bears are in a difficult situation now, they seem trapped. The breakout was temporary, if that demand level at the swing low was strong, there is a possibility of strong bullish move from here.

In P&F, ‘X’ is back!



This is bullish, but we need more confirmation. There is a tussle between bulls and bears at this point. If demand is not strong around current levels, price will fall and break previous low.

Previous low is a test of bulls.

Imagine price corrects from there. If bulls hold previous bottom, they are here to stay.



In P&F terminology, there shouldn’t be a double bottom sell.



If price maintains the bottom and goes above the previous high, it is a bullish strike-back pattern.

See below image.



We can make it completely objective using P&F, see below image of Bullish strike-back pattern.



Opposite is bearish strike-back pattern. Below image explains it.



You will find this pattern in the list of P&F and Renko charts in TradePoint. You can create systems, back- test and run scanner for this pattern.

If I run a scanner in EOD segment today on 0.25% box-value, SBILIFE is one of the candidates.



A = bearish breakout. B = bulls managed to bounce. C = bottom of A was protected. D = bullish strike- back.

Pattern fails if price falls below bottom of C

Hope concept is clear.

See below image.



Sorry for the bad drawing

It is like bears laughed, bulls smiled and attacked. They can prove dangerous!