Catapult
A catapult is a chart pattern showing a breakout, test, and strong resumption of the new trend. The market makes a tentative breakout only to fall back to the old pattern. However, it does not re-enter the pattern. The next move is a strong resumption of the new trend that began with the initial breakout. It is almost as if the market jumped onto a trampoline and is shot higher by the recoil.
The German DAX Index paused in late 1997 to correct a portion of its recent advance (see Figure 5). A declining trendline provided resistance during this period until the end of the year when it was finally broken to the upside. Note that the market ran higher initially but fell shortly thereafter. Technicians call this a “test” of the trend break. ...
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