Opening Range Breakout
by Toby Crabel
The bull hook pattern, as suggested by its name, is a bullish indication and, in most cases, will be
followed by a price move to the upside on the day or days following the hook. However, as you will see
from the tests I ran, this is not always the case.
A bull hook day (Figure 1) opens above the previous day's high and closes below the previous day's close
with a narrowing range. Tests of opening range breakout (ORB) trades taken the day following the bull
hook pattern are shown in Figure 2.
An ORB trade is entered at a predetermined amount above or below the opening range (the range of
prices that occur in first 30 seconds to 5 minutes of trading). The predetermined amount, or "stretch," is
the 10-day average of the differences between the open for each day and the closest extreme to the open
on each day. (See Stocks & Commodities, February and April 1989.)