Stock Price Pattern Analyzer - Bubble Top

Use the Stock Price Pattern Analyzer - Bubble Top to display the stock price trendline, price movement statistics and prices using daily closing prices for any stock listed on a major U.S. stock exchange and supported by Quandl. The analyzer uses the simple linear regression model to determine the price trendline.

You specify the Trendline Price Range: on the input form. For the Trendline Begin/End option the analyzer draws one upside trendline based on the minimum and maximum prices within the specified date range. For the All Prices option the analyzer draws the trendline for all prices of the specified period while ignoring the minimum and maximum prices.

If there is no upside trendline, the analyzer draws a downside trendline.

To see different trendlines shorten or lengthen the date range.

Stock Price Pattern Analyzer - Bubble Top
Stock Symbol:
Trendline Price Range: Trendline Begin/End All Prices 
Average Daily Price Rate of Change (Bubble Lower Range): %
Start Month:
Start Year:
End Month:
End Year:


All prices are adjusted for splits and dividends. The analyzer does not support exchange-traded funds (ETFs), mutual funds and indexes.

Looking for a Price Bubble

The analyzer computes the average daily price rate of change in percent of the trendline by dividing the difference of the maximum daily price and minimum price by the number of prices along the trendline. If the computed value of the average daily price rate of change is greater than the specified input value for the average daily price rate of change, the analyzer displays the message "Bubble top suspected."

Average Daily Price Rate of Change Examples

To determine a range of values for the average daily rate of price change associated with price bubbles, I examined five dot-com era stocks: Amazon.com, ASML Holdings, Cisco Systems, Lam Research and Qualcomm. Each stock formed a price bubble and peaked between 1999 and 2000:

The range of average daily price rate of change is 1.6% to 11%. Qualcomm had the highest rate of change. Amazon.com was the next highest.

The higher the rate of change the steeper the price upside.

Price Bubble Charts

Here are examples of price bubbles formed during the dot-com era. Each bubble represents an extreme price upside that lasted a relatively brief period before it crashed to the downside.

The price chart for Amazon.com (AMZN) shows ever steepening price upside stages indicating a price bubble formation. Its stock price moved from $4.00 in January 1998 to $106 by December 1999. It then formed a double top only to crash.




See chart of all prices for AMZN. See 3D chart of the price bubble.

See more charts of dot-com price bubbles (specified input value for the average daily rate of price change is 1.0 for each stock): Amazon.com ASML Holding Cisco Systems Lam Research QUALCOMM. See Topping Price Pattern - Bubble Top. See Lam Research (3D chart).

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