As of 09/18/2020
  Indus: 27,657 -244.56 -0.9%  
  Trans: 11,432 -120.44 -1.0%  
  Utils: 798 -12.86 -1.6%  
  Nasdaq: 10,793 -117.00 -1.1%  
  S&P 500: 3,319 -37.54 -1.1%  
YTD
-3.1%  
 +4.9%  
-9.2%  
 +20.3%  
 +2.7%  
  Targets    Overview: 09/14/2020  
  Up arrow29,400 or 26,700 by 10/01/2020
  Up arrow11,750 or 10,600 by 10/01/2020
  Up arrow845 or 775 by 10/01/2020
  Up arrow11,800 or 10,400 by 10/01/2020
  Up arrow3,600 or 3,200 by 10/01/2020
CPI (updated daily): Arrows on 8/18/20
As of 09/18/2020
  Indus: 27,657 -244.56 -0.9%  
  Trans: 11,432 -120.44 -1.0%  
  Utils: 798 -12.86 -1.6%  
  Nasdaq: 10,793 -117.00 -1.1%  
  S&P 500: 3,319 -37.54 -1.1%  
YTD
-3.1%  
 +4.9%  
-9.2%  
 +20.3%  
 +2.7%  
  Targets    Overview: 09/14/2020  
  Up arrow29,400 or 26,700 by 10/01/2020
  Up arrow11,750 or 10,600 by 10/01/2020
  Up arrow845 or 775 by 10/01/2020
  Up arrow11,800 or 10,400 by 10/01/2020
  Up arrow3,600 or 3,200 by 10/01/2020
CPI (updated daily): Arrows on 8/18/20

Bulkowski on Factors Influencing Stocks

 

How important are market and industry trends in influencing the behavior of your stock? Many people have asked that question, and this page provides at least part of the answer.

This is from the book, Investment Analysis and Management, by Stanley Huang, published in 1981 by Winthrop Publishers, Inc.

Here are the results from research on the influence of several factors on stock price changes.

Influencing FactorPercentage
Economy-wide30% to 35%
Company30% to 35%
Industry15% to 20%
Other15% to 20%

Huang cites a study done by Richard A. Brealey in An Introduction to Risk & Return from Common Stocks, published by M.I.T. Press in 1969. I averaged the results of the 63 stocks in 6 industries that he shows, covering the period from 1952 to 1960. Here's what I found.

Influencing FactorPercentageMin/Max
General market31%1%/66%
Company (stock)20%6%/42%
Industry12%0%/24%
Other37%13%/72%

Although the results are decades old, they do provide some idea of how important it is to consider the market and industry trends when trading stocks. The first category, general market, is an influence that affects all stocks. The company (stock) influences are factors that pertain to one stock. An industry influence is one that affects all stocks in the same industry. The ‘other' category includes a variety of influences that are not industry specific.

Notice how important the general market is to the price fluctuation of common stocks – 31%. Think of this as the importance of general economic conditions to stock behavior. What surprises me are the low 12% attributed to industry specific influences and 20% for stock (company specific) influences.

-- Thomas Bulkowski

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