Adam & Eve Chart Pattern

 Special Statistics regarding Adam and Eve Pattern 

When evaluating Adam and Eve patterns shape, ask yourself if the bottoms look the same or different. If they look the same, it's either Adam & Adam or Eve & Eve bottoms. The narrow bottom represents the Adam variety and the wide bottom represents the Eve variety. Ascend between alcoves. Look for a rise between the two troughs of at least 10%, measuring from the lowest to the highest between the two troughs. For example, consider Figure 13.2, which shows AADB. The pattern has two narrow floors, both spikes (the left side is longer than the right) and the volume is higher on the left than on the right. Twin bottom AB (top left) may look like a double bottom, but the 4% increase from A to C is not enough to be a true double bottom. The 10% slope number is arbitrary, but higher numbers indicate better performance (that is, larger patterns outperform smaller ones). lowest price. From the lowest low on the left to the low on the right, the price movement should be small. For example, don't try to assign Raise Bottom status to the bottom right and point D in Figure 13.2. Point D is not close enough to the right floor to qualify as a valid floor. After collecting statistics on AADB, we found that the best performance comes from lows where the price movement is between 2% and 5%. Patterns with a lower right border also perform better after breakout.

Number of formations. I found 281 AADBs in 500 stocks from mid-1991 to mid-1996 and from 2000 to 2004, with others between those dates. Reversal or continuation. The pattern is a bottom with an upward breakout. Thus, all acted as reversals of the downward price trend, by definition. Average rise. The 35% rise is about what you would expect from a bullish pattern in a bull market. The 24% bear market result surprised me because it is so low, but it nears the average of all other chart pattern types (25%). Rises over 45%. How well does this pattern do? In a bull market, over a quarter of the patterns (28%) climbed over 45%. Patterns in a bear market also held up well, with 15% soaring more than 45%.