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Plunger Pattern Information (updated in 2011)



A plunger is an Upperman reversal pattern. The plunger is intended to be used as a trading tool only, and should be used in conjunction with other Floyd Upperman and Associates trading tools and strategies. The plungers are not intended to be an independent trading strategy or system.

There are two kinds of plunger formations.  A forward plunger or "FP" is a bullish plunger. A reverse plunger or "RP" is a bearish plunger.  Plungers form on our daily price charts as well as our weekly price charts.  Our daily price charts are updated throughout the trading day, and at the end of each trading day (M-F).  Any markets exhibiting a plunger pattern (per the plunger criteria provided below) will automatically be listed in the plunger report(s).  The automated reports are updated during the course of normal trading hours each day, and at the end of the day (based on closing prices).  Daily plungers are not considered "official" until the end of the day.  Weekly plungers are not considered "official" until the end of the week (generally confirmed on Friday's close unless of course Friday is a holiday)

Current and past Plunger formations are noted on the charts using specific colors and/or symbols.  For example, a daily FP would be noted with a BLUE carrot on the x-axis of the daily trend/swing price graph.  A weekly FP would be noted by a painted BLUE weekly price bar on the weekly price chart.  Daily and weekly reverse plungers (RP) are noted the same way, except the color is RED. 

The plunger reports provide a listing of all current plungers. The plunger reports also provide entry point price ranges, logical stops, and calculated monetary risk. The Plunger Pattern Recognition program identifies active plunger formations. 

 

Plunger Criteria


The criteria for the daily plunger =  For a daily FP to form, the most recent intra-day high must meet or exceed a 10-day high.  For a daily RP, the most recent intra-day low must meet or exceed a 10-day low. Secondly, the most recent closing price (latest intra-day update or final end of day closing price) must be in the top or bottom 30% of that days range.  For a RP, it must be in the bottom 30%, for a FP it must be in the top 30%.  The daily plungers can occur and will be noted on our charts as they form on an intra-day basis as well as end of day basis.  HOWEVER, the only plungers considered official are the ones that form based on closing figures. 

Additional criteria for the daily plunger - The entire price range must also be at least 1/3 of an average days price range (for each specific market) for the plungers to occur. This eliminates plungers with extremely tiny intra-day ranges.

Weekly Plungers - The criteria for the weekly plungers are similar, except we are evaluating data on a weekly basis as opposed to daily. The close on Friday is the most important price of the week and this is when all weekly plungers are confirmed.  The same is true with daily plungers as well, that is, they are confirmed ("official") on the final official close of the normal trading day (based on the traditional trading hours which is still where most of the volume occurs, even though markets trade virtually around the close today).

One of the benefits of identifying plunger formations is that they provide excellent logical stops. If it turns out that the plunger pattern did identify a crucial turning point, the low/high of the plunger should not be penetrated. In other words, if the market moves higher following a forward plunger day, the low of the plunger day should not be penetrated. Thus, this is a logical area for a protective stop. Likewise on a reverse plunger day, if the market moves lower, the high of the reverse plunger day should not be penetrated. This is also a logical place for the protective stop.
 

Plunger Documentation & Examples


Documentation / Graphics / Charts

 

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