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's Study: Do Low Priced Patterns Outperform?

 

My book, Trading BasicsTrading Basics: Evolution of a Trader book., pictured on the left, can begin your journey to becoming a better trader.

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

-- Tom Bulkowski

$ $ $

Do chart patterns in low priced stocks outperform those from higher priced stocks? This page answers that question.

Overview
Bull Market Results
Bear Market Results
See Also

 

Low Priced Patterns: Overview

I looked at 16,664 chart patterns of various types (head-and-shoulders, double bottoms, and so on) in 958 stocks from 1991 to early 2005, encompassing both bull and bear markets. Not all stocks covered the entire period.

Low Priced Patterns: Bull Market Results

Price
Range
Up
Breakout
SamplesDown
Breakout
Samples
$0-10
61%
1,457
21%
1,091
10-20
42%
2,145
19%
1,879
20-30
33%
1,330
18%
1,215
30-40
30%
605
18%
587
40-50
24%
293
17%
280
50-60
24%
113
19%
117
60-70
21%
48
19%
40
>70
23%
39
25%
40

The above table shows bull market results for both upward and downward breakout directions. For example, the 1,457 chart patterns with breakouts priced over $0 and equal to or below $10, had an average rise of 61% after the breakout and before price tumbled by at least 20%, or closed below the chart pattern low, whichever came first. The 1,091 samples with downward breakouts showed declines averaging 21% before price climbed by at least 20% or rose above the top of the chart pattern, whichever came first.

Upward breakouts do best for low priced stocks and performance deteriorates as the breakout price rises until the samples skew the results. Downward breakouts show the same trend, with low priced stocks outperforming the high priced ones until the low sample counts skew the results.

Top of page More

Low Priced Patterns: Bear Market Results

Price
Range
Up
Breakout
SamplesDown
Breakout
Samples
$0-10
49%
318
25%
321
10-20
37%
822
25%
706
20-30
27%
709
23%
570
30-40
24%
449
25%
432
40-50
22%
267
23%
268
50-60
16%
163
25%
146
60-70
17%
69
31%
46
>70
19%
56
31%
43

The above table shows the bear market results for both up and down breakouts using the same methodology described earlier. For upward breakouts, the trend is clear with low price stocks outperforming the more expensive ones until the samples become few. Downward breakouts hold steady with declines averaging between 23% and 25% until samples become few.

-- Thomas Bulkowski

Top of page More

See Also

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.
Some pattern names are registered trademarks of their respective owners.

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