As of 04/02/2020   Indus: 21,413 +469.93 +2.2%     Trans: 7,446 +93.13 +1.3%     Utils: 729 +21.32 +3.0%     Nasdaq: 7,487 +126.73 +1.7%     S&P 500: 2,527 +46.40 +1.9%	YTD -25.0%   -31.7%   -17.0%   -16.6%   -21.8%	Targets    Overview: 03/15/2020     19,000 or 25,600 by 04/15/2020   6,700 or 9,000 by 04/15/2020   600 or 800 by 04/15/2020   7,000 or 8,400 by 04/15/2020   2,300 or 2,900 by 04/15/2020
CPI (updated daily): on 4/1/20

As of 04/02/2020   Indus: 21,413 +469.93 +2.2%     Trans: 7,446 +93.13 +1.3%     Utils: 729 +21.32 +3.0%     Nasdaq: 7,487 +126.73 +1.7%     S&P 500: 2,527 +46.40 +1.9%	YTD -25.0%   -31.7%   -17.0%   -16.6%   -21.8%
Targets    Overview: 03/15/2020     19,000 or 25,600 by 04/15/2020   6,700 or 9,000 by 04/15/2020   600 or 800 by 04/15/2020   7,000 or 8,400 by 04/15/2020   2,300 or 2,900 by 04/15/2020
CPI (updated daily): on 4/1/20

Bulkowski's Study: Do Low Priced Patterns Outperform?

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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

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.

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Low Priced Patterns: Bear Market Results

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

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