Chevron-Texaco (CVX): Daily Bullish Butterfly at Bullish RSI BAMM Confirmation Point

As illustrated in the chart in Figure 6.20 of the Bullish Butterfly pattern in our Chevron-Texaco example, the stock possessed an ideal RSI BAMM setup. The completion of the pattern coincided with the RSI BAMM confirmation. As the price declined and formed the pattern structure, the secondary impulsive RSI test at the Confirmation Point reversed above the prior complex formation.

Figure 6.20.

This is a fantastic example because the Bullish Butterfly pattern was such a distinct structure. The completion of the pattern marked a critical low on the daily chart, and the price action stabilized after completely testing the PRZ. The reversal turned at the completion of the pattern and the RSI BAMM, and started to rally shortly thereafter.