How to Measure a Stock's Peak to Peak Cycle

Measure cycles to determine likely peaks in a stock.
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If you have looked at a stock chart and noticed some patterns, you are likely on to something: Markets often display patterns, although there is usually some variability that can make those patterns hard to see. Cycles are an element of technical analysis which attempt to distinguish a repeating topping and bottoming pattern in stocks. A peak-to-peak cycle can provide you with a time frame for when a stock is likely to top out and begin to reverse. Cycles should be used in conjunction with other indicators and strategies, as they provide a potential time span for reversals, but not exact entry or exit points.

Finding Peak-to-Peak Stock Cycles

Step 1

Open a chart to the price history of a stock. The more historical data you view, the better, as this will allow you to see multiple peaks in the stock's price. You can access free charts at websites including or

Step 2

Mark each major crest in the stock's price history. A crest is a major peak in the stock price. Sometimes two crests appear very close to each other. Mark the last peak in this case, as that is when the stock ultimately peaked before declining.

Step 3

Measure the distance, in time, from one crest to the next. Repeat this process until you have measured the distance between all the peaks on your chart. Depending on the time frame you're viewing, the peaks may be minutes, days, weeks, years or even decades apart.

Step 4

Record the lowest and highest distances between the peaks in price. This will provide you a range of values for forecasting future price peaks. For example, a stock may have taken 13, 15, 16 and 18 weeks to move from peak-to-peak over the last four cycles. From this you can gauge that the next peak could occur 13 to 18 weeks after the most recent peak.

Step 5

Make a forecast of when the next peak is likely to occur. Add the lowest and highest prior cycle values to the date of the most recent peak. This will provide you with a time frame for when the next crest could occur.

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