Horn Bottoms
3 min read
Core idea
A horn bottom is a three-week pattern on the weekly chart: two unusually tall downward price spikes separated by one quieter week, with the middle week sitting well above either spike low. Flipped upside down, the pattern resembles a steer's horns. It marks the end of a downtrend and the start of a rally.
Bulkowski derived horns by extending his double-bottom research: what happens if the two bottoms are only a week apart? The answer is that the pattern works very well — low failure rate, high average rise, and it ranks favorably against other weekly-scale patterns (pipes and diving boards).
Why it matters
Most chart patterns require weeks or months of price action and substantial visual interpretation. Horn bottoms are three bars on a weekly chart — almost binary. They form fast, they're easy to scan for, and they call exact bottoms in many cases. The trade-off is they live on the weekly scale, which means a slower rhythm and longer hold times than equivalent daily patterns.
Why the weekly chart matters
Bulkowski explicitly does the math on weekly data, not daily. On the weekly chart, an "ultimate high" search continues until the closing price at week's end drops below the pattern. That's a higher bar than an intraday violation, so trends extend longer and average rises look larger. Don't compare horn-bottom statistics directly with daily-scale patterns.
Visibility and rarity beat aesthetics
For a horn to count, the two spikes must stand alone — taller than other downward spikes during the surrounding year. If the chart is a "jagged coastline" of similar spikes, your horn isn't special and the signal is weaker.
Key takeaways
Mental model
Practical application
A weekly-chart scanning routine
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Switch to weekly charts and scan downtrends. Horns can also appear in uptrends as retracement bottoms, but downtrends are where they're cleanest.
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Look for two adjacent weeks with tall downward price spikes — bottoms reaching well below the surrounding price track.
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Verify the middle week stays above either spike's low. If the middle week is also a deep spike, you have a triple-bottom shape, not a horn.
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Compare against the past year's spikes. If the two horn weeks are not noticeably taller than other downward spikes in recent months, skip the trade.
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Wait for a close above the highest high in the three-week pattern. Buy on confirmation.
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Stop placement: below the lower of the two spike lows. Halving the pattern means a stop at the midpoint — Bulkowski's stop tables can guide which choice fits your tolerance.
Example
A mid-cap industrial stock has slid from $52 to $31 over four months. On the weekly chart you see:
- Week 1: spike low at $30 (close $32, volume 2× average).
- Week 2: shallow week, low $33, close $34, lower volume.
- Week 3: spike low at $30.20 (close $33, volume 1.8× average).
The pattern high is $35. Three weeks later the stock closes at $35.40 — confirmation. You enter at $35.80 with a stop at $29.50 (just below the lower spike). Volume on the breakout week is the highest in two months. Over the next six months, price climbs to $48 — a 34% gain, near Bulkowski's bear-market average for horn bottoms.
Compare with a "failed" horn: same three-week shape, but the surrounding chart is littered with similar-height down spikes, and price never closes above $35. By definition, that's not a horn — you saved yourself a losing trade by enforcing the visibility and confirmation rules.
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