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Bulkowski's Study: Do Low Priced Patterns Outperform?
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As of 04/25/2019
Industrials: 26,462 -134.97 -0.5%
Transports: 10,846 -253.37 -2.3%
Utilities: 780 +3.53 +0.5%
Nasdaq: 8,119 +16.67 +0.2%
S&P 500: 2,926 -1.08 0.0%
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YTD
+13.4%
+18.3%
+9.5%
+22.4%
+16.7%
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 26,900 or 25,500 by 05/01/2019
11,200 or 10,500 by 05/01/2019
825 or 755 by 05/01/2019
8,250 or 7,850 by 05/15/2019
2,975 or 2,800 by 05/01/2019
|
|
As of 04/25/2019
Industrials: 26,462 -134.97 -0.5%
Transports: 10,846 -253.37 -2.3%
Utilities: 780 +3.53 +0.5%
Nasdaq: 8,119 +16.67 +0.2%
S&P 500: 2,926 -1.08 0.0%
|
YTD
+13.4%
+18.3%
+9.5%
+22.4%
+16.7%
|
26,900 or 25,500 by 05/01/2019
11,200 or 10,500 by 05/01/2019
825 or 755 by 05/01/2019
8,250 or 7,850 by 05/15/2019
2,975 or 2,800 by 05/01/2019
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|
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Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions.
See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.
My book,
Trading Basics  ,
pictured on the left, can begin your journey to becoming a better trader.
If you click on this link and then buy the book (or anything) 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.
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 | Samples | Down
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.
Low Priced Patterns: Bear Market Results
Price
Range | Up
Breakout | Samples | Down
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
Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions.
See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.
My wife is like an angel, always up in the air harping on something.
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If you buy ANYTHING, they pay for the referral. My books...
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