Bulkowski’s Spikes or Tails

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Spikes, or tails as they are sometimes called, represent short-term price turning points. Bullish spikes plunge downward and are more reliable than those that tower upward.

Spikes or tails chart pattern

Identification Guidelines

Characteristic	Discussion
Price trend	Can be any direction leading to the pattern, but is usually in the direction of the spike (downward for bullish spikes, upward for bearish spikes)
Shape	A tall price move with the closing price near the base of the spike.
Closing price	For upward spikes, the close should be near the intraday low. For downward spikes, the close should be near the intraday high.
Volume	Usually heavy.
Bullish spike	Price spikes downward before closing near the intraday high. Price often represents a low turning point.
Bearish spike	Price spikes upward but closes near the intraday low. Price often forms a peak but usually does not represent a major or sustained turning point.
Wait a day	Wait a day to be sure that the price spike stands alone like the above picture shows.

Trading Tips

Trading Tactic

Explanation

Upward spike For swing traders, expect a downward price swing. The turn may not last long, however.

Downward spike Downward spikes represent more reliable price turning points than do upward ones. Buy once it’s clear the spike or tail stands alone like a tall pine tree on a barren hill.

Short term Both upward and downward price spikes usually represent short-term turning points. Thus, don’t expect price to make a major and lasting trend change.

Caution Be cautious with spikes where the close is not near the intraday low (upward spike) or high (downward spike).