Looking for a reliable continuation pattern to catch strong uptrends? The P&F Bullish Catapult Pattern is a high-probability signal that helps traders confirm momentum and enter trades with confidence. In this post, we’ll break down its structure, trading strategy, and the psychology behind it.
What is the P&F Bullish Catapult Pattern?
The P&F (Point & Figure) Bullish Catapult Pattern is a continuation formation that signals a strong resumption of an uptrend. It represents a period of consolidation followed by a breakout, indicating that bullish momentum is still intact. Unlike time-based charts, P&F charts track only price changes, reducing market noise and offering clearer trend insights.
Looking for information on the P&F Bullish Catapult pattern stock screener? Click here.
Structure of the P&F Bullish Catapult Pattern
This pattern consists of the following key elements:
- Initial Upward Move (Column of X’s)
- A strong bullish move establishes an uptrend, forming a column of X’s.
- Pullback (Column of O’s)
- The price experiences a mild retracement, creating a column of O’s, which signals a temporary pause in the trend.
- Break Above Previous Highs (New Column of X’s)
- A renewed buying wave forms another column of X’s, surpassing the prior high, generating a Double Top buy signal.
- Final Retest and Breakout
- A second shallow pullback (column of O’s) holds above support.
- A breakout above the previous high, generates a Double Top buy signal, confirms bullish strength and completes the pattern.
Also see: P&F Bearish Catapult Pattern
How to Trade the P&F Bullish Catapult Pattern
- Entry Point:
- Enter a long position when the price breaks above the second column of X’s, confirming the breakout.
- Stop Loss Placement:
- Place a stop loss just below the support level formed during the pullbacks to manage risk.
- Profit Target:
- Measure the distance between the breakout level and the nearest support. Add this distance to the breakout price to project a target.
- Confirm with Other Indicators:
- Strengthen your setup using moving averages, relative strength index (RSI), or volume analysis for added confirmation.
See: Stop Loss . . . and its importance in trading – Some ways of setting up stop loss levels
Also see: Some ways of setting up take profit levels
Also see: How to determine one’s tolerance to risk?
The Psychology Behind the P&F Bullish Catapult Pattern
The P&F Bullish Catapult Pattern reveals the psychology of market participants:
- Initial Uptrend: Traders and investors are bullish, driving prices higher.
- Pullback & Consolidation: Profit-taking and market hesitation create a temporary pause. Weak hands exit, while strong hands accumulate.
- Breakout Confirmation: Renewed buying pressure forces prices above previous highs, confirming bullish momentum and attracting new buyers.
- Final Breakout: As the breakout holds, sidelined traders jump in, fueling the next leg of the uptrend.
Understanding this psychology allows traders to anticipate price movements and trade with conviction.
Key Benefits of the P&F Bullish Catapult Pattern
- Clear & Objective: P&F charts eliminate market noise, making patterns easier to identify.
- Reliable Buy Signals: The breakout mechanism helps confirm trend continuation.
- Defined Risk & Reward: The structure provides clear stop-loss levels and profit targets.
Final Thoughts
The P&F Bullish Catapult Pattern is a powerful tool for traders seeking high-probability trade setups in an uptrend. By combining price action, trader psychology, and risk management, this pattern provides a clear path for entering strong bullish moves with confidence.
Want to spot Bullish Catapult Patterns effortlessly? Try ChartAlert, our powerful desktop trading software. Sign up today for a paid 4-week evaluation trial and take your trading strategy to the next level!
For examples of customizable P&F Bullish Catapult pattern factory stock scans that can be edited, modified, or revised, and subsequently scanned through ChartAlert’s native stock screener or technical analysis scanner, click here.