Island Reversal Bullish Chart Pattern

Implication

An Island Bottom is a bullish signal indicating a possible reversal of the current downtrend to a new uptrend. This pattern is an indication of a financial instrument's SHORT-TERM outlook.

Description

The Island Bottom occurs when the price "gaps" below a specific price range for a number of days and then is confirmed when the price "gaps" above the original range.

Island Top Short-term Pattern

Implication

An Island Top is a bearish signal indicating a possible reversal of the current uptrend to a new downtrend. This pattern is an indication of a financial instrument's SHORT-TERM outlook.

Description

The Island Top occurs when the price "gaps" above a specific price range for a number of days and then is confirmed when the price "gaps" down below to the original range.

Statistics--Bottoms

Percent of successful formations – 85% Average rise of successful formations – 34% Likely decline – 20% Failure rate - 17% Average time to throwback completion – 9 days

Statistics--Tops

Percent of successful formations – 77% Average decline of successful formations – 21% Likely decline – 10% Failure rate - 13% Average time to throwback completion –8 days

CHART EXAMPLE