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Written by and copyright © 2005-2008 by Thomas N. Bulkowski. All rights reserved.
How often
does a chart pattern appear? To answer that, I scanned my database of 500 stocks
during the bull market of July 1991 to July
1996. Here are the results of the top five frequently appearing chart patterns for
up and down breakouts.
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Upward breakouts
1
= most common out of 35 |
Average Rise Rank |
Failure Rate Rank |
Overall Rank |
|
1.
Pipe bottoms |
4 out of 22 |
5 out of 16 |
2 out of 23 |
|
2.
Ascending triangles, up breakout |
12 |
12 |
17 |
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3.
Ascending scallops |
16 |
10 |
16 |
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4.
Head-and-shoulders bottoms |
9 |
3 |
7 |
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5.
Bump-and-run reversal bottoms |
9 |
2 |
8 |
The average rise measures
from the breakout price to the ultimate high before price tumbles at least 20%. Failures are a count of how many chart patterns
fail to rise at least 5% after the breakout. The overall rank is the average rise rank plus the failure rate rank plus the
change after the trend ends rank (not shown). A rank of 1 is best. Ties were given the same rank.
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Downward Breakouts
1
= most common out of 34 |
Average Decline Rank |
Failure Rate Rank |
Overall Rank |
|
1.
Bump-and-run reversal tops |
5 out of 10 |
10 our to 19 |
3 out of 20 |
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2.
Descending triangles |
8 |
3 |
10 |
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3.
Head-and-shoulders tops |
2 |
14 |
1 |
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4.
Inverted and descending scallops |
6 |
2 |
6 |
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5.
Pipe tops |
4 |
8 |
4 |
Performance for downward
breakouts is the same as upward breakouts, but I looked for the lowest low before price climbed by at least 20%.
To download an Excel spreadsheet
of the complete list along with performance data, click
here.
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