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Written by and copyright © 2005-2010 by Thomas N. Bulkowski. All rights reserved.
For more information on this pattern, read
Encyclopedia of Chart Patterns, Second Edition  ,
pictured on the right, pages 908 to 920. That chapter gives a complete review of the chart pattern, including tour, identification guidelines, focus on failures, performance statistics, trading tactics, and sample trade. Below is just a sliver of the information contained in the book.
Periodically, retailers announce same-store sales numbers
(sometimes called ’comparable store sales’). Usually, these are sales results
for stores open at least a year. Bad same-store sales make an event pattern on which you can
trade. Discovered by Thomas Bulkowski in the fall of 2003.
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Bad Same Store Sales
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Important Bull Market Results
Overall performance rank (1 is best): 1 out of 5
Break even failure rate: 26%
Average decline: 12%
Pullback rate: 53%
Percentage meeting price target: 68%
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Identification Guidelines
| Characteristic | Discussion |
| Price trend | Usually found in a price downtrend. |
| Announcement | The company announces monthly or quarterly same-store sales numbers. |
| Wide swing | Look for announcements in which price makes a large intraday swing, 2 or 3 times the average daily price swing over the last month. |
| Downward breakout | A breakout occurs when price closes below the lowest low posted on the announcement day. |
| Volume | Above the 30-day average, usually. |
| Market | Works best in a bear market. |
Trading Tips
| Trading Tactic | Explanation |
| Measure rule | Reference The Measure Rule figure to the right.
On the announcement day, subtract the intraday low
(point B) from the high
(A) and multiply it by the above “percentage
meeting price target.” Subtract the result from the intraday low
(B) to get a price target
(C). |
| Confirmation | Wait for price to confirm the pattern
because traders may push price up instead. A downward breakout (confirmation) happens when price closes below the low posted
on the announcement day. |
| Sell | Sell a long holding or short the stock after confirmation. |
| Repetition | Another bad same-store sales announcement often follows the first one. |
| Yearly middle | Patterns in the middle third of the yearly price range show the best performance. |
| Bottom | Price may bottom quickly. Over 60% bottom in less than 2 weeks in a bull market, 57% in a bear market. |
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 The Measure Rule
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Example
The above figure shows an example of a same-store sales event pattern. Price leaves a consolidation region at
A and shoots up to B. Then the stock begins a long slide
downward. Along the way, the same-store sales number becomes public and the results send the stock down. Price attempts
a pullback in February, but then price resumes the downward move.
-- Thomas Bulkowski
Copyright © 2005-2010 by Thomas N. Bulkowski. All rights reserved. In God we trust. All others we monitor. -- NSA
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