[stock-ticker]

What is a Bump and Run Reversal ?

According to stock charts.com- As the name implies, the Bump and Run Reversal (BARR) is a reversal pattern that forms after excessive speculation drives prices up too far, too fast. Developed by Thomas Bulkowski, the pattern was introduced in the June-97 issue of Technical Analysis of Stocks and Commodities and also included in his recently published book, the Encyclopedia of Chart Patterns.

The pattern was originally named the Bump and Run Formation, or BARF. Bulkowski decided that Wall Street was not ready for such an acronym and changed the name to Bump and Run Reversal. Bulkowski identified three main phases to the pattern: lead-in, bump and run. We will examine these phases and also look at volume and pattern validation.

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WTI has participated in a 15 year bump and run formation signaling a reversal. The cycle started in 1999 and reversed in 2H15. Since the breakdown, the market has formed 2 attempts to maintain the 15 year lead-in. Such attempts have failed and the most recent failure will be confirmed by the end of week in an evening star. Recent attempts have produced a minor BARR formation labeled BARR 1 Year this will eventually reverse to the upside, but lower price will be needed to pierce the supply line.

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