Catapult Pattern: Two Breakouts in the Same Direction

Key Takeaways

• A catapult combines two consecutive point and figure breakouts in the same direction with a pullback in between.
• The bullish version is a triple top breakout, a pullback, then a double top breakout; the bearish version mirrors it.
• The most common mistake is acting on the first breakout alone and missing the confirming second break.
• The pullback must not generate a reverse signal, or the catapult is invalidated.

What It Is

A catapult is a point and figure pattern built from two breakouts pointing the same way. Point and figure charts plot rising prices as columns of X's and falling prices as columns of O's, filtering out time and small noise. A breakout happens when a new column pushes past the high or low of prior columns.

The bullish catapult begins with a triple top breakout, where an X column pushes above two earlier peaks. Price then pulls back into the pattern in an O column without breaking the prior low, and finally a new X column breaks out again in a double top breakout. The bearish catapult is the mirror image: a triple bottom breakdown, a weak bounce, then a double bottom breakdown.

The Intuition

A single breakout shows that demand has overcome supply at one level. But breakouts can fail, and a pullback after the first break tests whether the buyers were real. The catapult is designed around that test.

When price breaks out, pulls back, and the pullback holds without reversing the trend, it shows the buyers absorbed the profit-taking and are still in control. The second breakout confirms that strength. The name captures the idea: the pullback loads the catapult, and the second breakout launches the move.

How the Catapult Pattern Point and Figure Build Works

The bullish catapult follows a defined sequence across at least seven columns:

1. Triple top breakout   (X column clears two prior peaks)
2. Pullback              (O column dips back in, low holds)
3. Double top breakout   (new X column clears the prior X)

The key constraint is the middle step. The pullback O column must not fall far enough to trigger a reverse, bearish signal such as a double bottom breakdown. If it does, the pattern is dead and the bullish read is gone. A pullback that holds, then gives way to a fresh breakout, completes the catapult.

The bearish catapult inverts every step: a triple bottom breakdown, a bounce that fails to clear prior highs, then a double bottom breakdown. Practitioners often set a price target using the point and figure count methods, either the vertical count from the breakout column or the horizontal count across the base. The catapult itself is the entry signal, not the target tool.

Some practitioners report that catapults tend to lead to faster follow-through than a single breakout, since the pattern requires the trend to prove itself twice. Treat that as a tendency rather than a measured certainty, since formal statistics on point and figure catapults are limited.

Worked Example

A stock builds a base where an X column rises to 50, twice failing at that level in earlier columns. On the third attempt, a new X column closes at 51, clearing both prior 50 peaks. That is a triple top breakout, the first leg of the catapult.

Price then reverses into an O column and pulls back to 47, but the prior pattern low sits at 45, so no reverse signal fires. Buyers return and a new X column pushes to 52, exceeding the earlier 51 high. That double top breakout completes the bullish catapult. A trader might enter on the second breakout near 52, using the pattern low at 45 as a stop reference and a point and figure count for the target.

Common Mistakes

1. Trading the first breakout as the catapult. The pattern needs two breakouts. Acting on the triple top alone is just a triple top trade, not a catapult.
2. Ignoring the reverse-signal rule. If the pullback triggers a double bottom breakdown, the catapult fails. The pullback must hold.
3. Confusing the bullish and bearish versions. A triple top breakout is bullish, a triple bottom breakdown is bearish. Mislabeling the direction inverts the trade.
4. Skipping the count for a target. The catapult signals entry, but it does not project a target by itself. Use a vertical or horizontal point and figure count.
5. Assuming guaranteed speed. The reputation for fast follow-through is a tendency, not a rule. A stop is still required.

Frequently Asked Questions

What is a catapult pattern point and figure setup in simple terms? It is two breakouts in the same direction with a small pullback in between. The second breakout confirms that the first was real.

How does a catapult pattern affect investment decisions? The second breakout gives a confirmed entry with the pullback low as a logical stop. A point and figure count then projects the target, framing a complete plan.

What is a real-world example of a catapult pattern? A stock breaking above 50 on a triple top, pulling back to 47 without reversing, then breaking to 52 on a double top traces a bullish catapult before a further advance.

How can investors use the catapult pattern effectively? Wait for the confirming second breakout rather than the first, require the pullback to hold without a reverse signal, and use a point and figure count for the target with a stop at the pattern extreme.

How is a catapult different from a simple double top breakout? A double top breakout is a single breakout above one prior peak. A catapult stacks two breakouts, usually a triple top followed by a double top, with a pullback between them.

Sources

1. StockCharts ChartSchool. "P&F Catapults." https://chartschool.stockcharts.com/table-of-contents/chart-analysis/point-and-figure-charts/classic-patterns/p-and-f-catapults
2. TradeStation Help. "Bullish and Bearish Catapult P&F Formations." https://help.tradestation.com/10_00/eng/tradestationhelp/p_and_f_charts/bull_bear_catapult_pf_formations.htm
3. Dorsey, T.J. (2007). Point and Figure Charting. Wiley. https://oxlive.dorseywright.com/university/lesson02/index2_4.html
4. StockCharts ChartSchool. "P&F Pattern Alerts." https://chartschool.stockcharts.com/table-of-contents/chart-analysis/point-and-figure-charts/p-and-f-scans-and-alerts/p-and-f-pattern-alerts

Disclaimer

This article is educational content only and is not financial advice. Nothing here is a recommendation to buy, sell, or hold any security. Consult a licensed advisor before making investment decisions.