Bump-and-Run Reversal, Top
3 min read
Core idea
The bump-and-run reversal top (BARR top) is the pattern Bulkowski discovered first — an attempt to model the visual relationship between an up-sloping trendline and the eventual breakdown of the trend it supports. Price rises along a moderate trendline (the lead-in phase), then enters a bump phase where momentum carries price well above the trendline, rounds over, and crashes back down through the trendline on accelerating selling pressure. The pattern ranks third for downside performance in both bull and bear markets — meaning its average declines are among the best of all chart patterns.
Mountain-range geometry
The lead-in is the foothills — subdued oscillations along a 30°-ish up-sloping trendline. The bump is the mountain — a sharp rally on a steeper 45°-60° trendline. The downhill run is the far side — price rounds over, returns to and pierces the lead-in trendline, and continues lower as momentum-followers exit en masse.
The two-to-one rule
For a pattern to qualify, the bump height (vertical distance from the lead-in trendline to the highest peak) must be at least twice the lead-in height. This forces investor enthusiasm in the bump to be genuinely excessive — sustainable rallies don't trigger the pattern; speculative manias do.
Why it matters
BARR tops are useful precisely because they identify momentum overshoots that don't survive their own success. The pattern's discovery was driven by a practical question — can a trendline tell me how far price will fall when it breaks? — and the answer turned out to be approximately yes. Combined with a low failure rate and clear stop placement (above the bump peak), this is a setup with operational discipline built in.
Key takeaways
Mental model
Practical application
A patient short-selling plan
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Identify the lead-in. Draw a trendline through the lows of the early uptrend. The slope should be ~30°. Measure the lead-in height (vertical distance from trendline to highest high in the first quarter).
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Wait for the bump. When price launches sharply higher on a steeper trendline, measure bump height. If less than 2× lead-in height, abandon the pattern.
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Don't short the top of the bump. It's tempting but high-risk; price can extend further than the pattern's geometry suggests.
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Use trendline break as the entry. Wait for a close below the original lead-in trendline. This filters out the 5% failures.
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Stop above the bump peak. A close back above the highest high invalidates the pattern.
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Use parallel warning and sell lines. Draw parallel lines above the lead-in trendline at fractional distances; use them to scale out as price climbs in the bump phase. Bulkowski uses this technique to maximize exit prices on long holdings.
Long-holders' use case
Example
A networking-equipment stock has climbed from $25 to $35 over four months, with lows trending up along a 30° trendline. Lead-in height (trendline to highest high in Q1): about $1.40. The stock then breaks out sharply, jumping from $26 to $42 in six weeks — bump height of about $8, well over 2× lead-in. The pattern qualifies as a BARR top.
Over the next two months price rounds over at $42 and drifts back down to the lead-in trendline (now around $30). It bounces, climbs to $38 — a dual bump — then breaks down through the trendline at $28. A trader shorts at $27.50 with a stop at $43 (above the higher of the two bumps). Three months later the stock is at $17 — a 38% decline, on a pattern that historically averages strong downside performance.
Alternatively, a long-holder who used a warning line at $36 and a sell line at $32 was out at $32 — capturing most of the bump gain without depending on the trendline break.
Related lessons
Related concepts
- Chart Patternlinked concept
- Breakoutlinked concept
- Reversal Patternslinked concept
- Momentumlinked concept
- Lead-In Phaselinked concept