The Bump and Run Reversal (BARR) was identified by Thomas Bulkowski. It identifies stocks in speculative bubbles โ where price has accelerated far beyond a sustainable trendline. The pattern has three phases: a Lead-in (normal trend), a Bump (parabolic acceleration), and a Run (sharp reversal). It is particularly relevant on NSE stocks that become "momentum darlings."
BARR Pattern Diagram
Lead-in: normal slope | Bump: parabolic acceleration | Run: reversal back to trendline
Three Phases Explained
| Phase | Characteristics | Trendline Angle |
|---|---|---|
| Lead-in | Normal, sustainable uptrend lasting months | 30โ45 degrees |
| Bump | Speculative acceleration โ price rises at double or triple the Lead-in angle | 60โ80 degrees |
| Run | Sharp reversal โ price often returns to the Lead-in trendline | Steep decline |
Identifying the Bump
- The Bump trendline angle is at least 2ร the Lead-in trendline angle
- Volume increases sharply during the Bump โ speculative frenzy
- Media coverage and social media attention peak during the Bump
- The stock is up 50โ200% in a short period
Trading the Run (Short Entry):
Entry: Short when price breaks back below the Lead-in trendline
Stop Loss: Above the most recent high of the Bump
Target: Starting point of the Bump (at minimum)
Warning signs the Bump is ending:
โ Volume climax (highest volume day) โ often the top
โ RSI divergence at the peak
โ Stock runs into a major Fibonacci extension level
Entry: Short when price breaks back below the Lead-in trendline
Stop Loss: Above the most recent high of the Bump
Target: Starting point of the Bump (at minimum)
Warning signs the Bump is ending:
โ Volume climax (highest volume day) โ often the top
โ RSI divergence at the peak
โ Stock runs into a major Fibonacci extension level
NSE produces BARR patterns in stocks that attract retail speculative interest โ small-cap "multibagger" stories, penny stocks receiving operator attention, or mid-caps riding a hot sector theme. The Lead-in might be a genuine 2-year uptrend, the Bump is 6 months of frenzy, and the Run gives back most of the Bump in weeks.
