Home Depot (HD): Daily Bullish AB=CD BAMM

The weekly chart in Figure 5.10 shows a distinct Bearish AB=CD pattern that formed over the course of six months. The structure rallied above the prior B point and accelerated to the completion point of the pattern.

Figure 5.10.

It is important to underscore the degree of confidence in the overall trend bias that these situations instill. Although this technical understanding does not dismiss effective trade management strategies to capitalize on these potential opportunities, the BAMM phenomenon offers a great deal of evidence about the state of the predominant trend and a reliable completion target for the price move. Defining these price constraints based from the BAMM conditions instills a great deal of confidence in the position, as all parameters are outlined in advance. In essence, these high-probability BAMM zones create tradable “windows” of price segments.