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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's 13 New Price Lines

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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 01/18/2017
19,805 -22.05 -0.1%
9,141 41.29 0.5%
664 -0.93 -0.1%
5,556 16.92 0.3%
2,272 4.00 0.2%
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0.6%
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Tom's Targets    Overview: 01/18/2017
19,250 or 20,250 by 02/01/2017
8,800 or 9,500 by 02/01/2017
685 or 630 by 02/01/2017
5,700 or 5,400 by 02/01/2017
2,200 or 2,350 by 02/01/2017
Indus strength: None YTD
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Mutt Winners: None YTD

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

My book, Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book., pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

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The 13 new price lines candle pattern is as it sounds: 13 candle lines in a row, each with a high higher than the previous one. It is supposed to act as a bearish reversal and it does, but only 57% of the time in a bull market. That is what I call "near random."

Overall performance ranks 95th out of 103 candle patterns and that isn't good. It suggests a short price trend after the breakout.

13 New Price Lines Important Results

Theoretical performance: Bearish reversal
Tested performance: Bearish reversal 57% of the time
Frequency rank: 90
Overall performance rank: 95
Best percentage meeting price target: 80% (bear market, down breakout)
Best average move in 10 days: -4.38% (bear market, down breakout)
Best 10-day performance rank: 42 (bear market, down breakout)

All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts.

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

The ideal 13 new price lines candlestick
13 New Price Lines
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13 New Price Lines Discussion

The 13 new price lines act as a bearish reversal of the existing price trend 57% of the time, which is close to random. The frequency rank is 90, so it is unlikely that you will find this candle price pattern often. The overall performance rank is 95 which would be great if the best performance was 103, but it's not. 103 is the worst rank and 1 is the best.

With the new lines candles, 8, 10, 12, and 13, I determine the breakout direction using the last candle line in the pattern. A close above the top or a close below the bottom of it would constitute an up or down breakout, respectively. The measure rule (percentage meeting price target) is based on taking the height of the move from the first to last candle in the pattern and dividing by 6 for upward breakouts or 3 for downward breakouts. The reason for this is because the pattern can be quite tall and using the full height would set an almost impossible target.

Price meets the target after a downward breakout in a bear market 80% of the time. The best average move 10 days after a breakout is a drop of 4.38% in a bear market. A good move would be 6% or more, so this falls a bit short. The performance over 10 days scores a rank of 42, or slightly better than mid list.

13 New Price Lines Identification Guidelines

CharacteristicDiscussion
Number of candle linesThirteen.
Price trend leading to the patternNone required.
ConfigurationLook for thirteen consecutive candle lines, each with a higher high.
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Three Trading Tidbits for 13 New Price Lines

If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.

  1. 13 new price lines candles within a third of the yearly low act as reversals most often -- page 67.
  2. 13 new price lines break out upward most often in a bear market -- page 66.
  3. Volume gives performance clues -- page 65.

The 13 new price lines candlestick on the daily scale

13 New Price Lines Example

The chart shows the 13 new price lines candlestick pattern on the daily scale, points 1 through 13. It also shows 8, 10 and 12 new price lines candlesticks. Notice how none of them act as reversal patterns. Price just keeps moving up until day 15. After that, price drops, but only for a few days before the uptrend continues.

Based on this chart, and many others like it, to say that price will reverse after 8, 10, 12 or 13 days of higher highs is just guessing.

-- Thomas Bulkowski

 

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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. If you're happy and you know it, see a shrink.