We Love the Shakeout Pattern

April 20, 2015 by Thomas Mullooly

Here at Mullooly Asset Management, we love the shakeout pattern! Not familiar with the point and figure charting pattern we’re referencing? No problem, Tim explains the basics in another video you should watch: https://mullooly.net/the-shakeout-pattern/8056

Now that you’re up to speed, we’ll explain what’s so great about the shakeout pattern. This pattern typically occurs within a long term uptrend. Many people wonder how a pattern with a sell signal inside it could be considered bullish? The sell signal quite literally “shakes out” the weaker holders of the security. If you’ve been waiting for a chance to buy a particular stock, mutual fund, or ETF the shakeout could present you with that opportunity. The sell signal within a shakeout pattern is normally a pause within an otherwise strong uptrend. When the pattern is completed with a new triple top buy signal, chances are, that security is going to continue right along. This is a strong bullish pattern that we love to see.

Check out the video above as Tom walks through the shakeout pattern!

About Thomas Mullooly

Thomas Mullooly is owner and founder of Mullooly Asset Management, Inc. In 2002 Tom opened Mullooly Asset Management, a fee-only investment advisory firm. As an investment advisor, and not a broker, Tom works strictly for his clients. With the help of point and figure charting, Tom builds a realistic game plan for clients.