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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's Bad Same-Store Sales

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Industrials (^DJI):
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As of 06/23/2017
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For more information on this pattern, read Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right, pages 908 to 920.

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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.

Bad same store sales
Bad Same Store Sales

 

Bad Same-Store Sales: 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%

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

Bad Same-Store Sales: Identification Guidelines

CharacteristicDiscussion
Price trendUsually found in a price downtrend.
AnnouncementThe company announces monthly or quarterly same-store sales numbers.
Wide swingLook for announcements in which price makes a large intraday swing, 2 or 3 times the average daily price swing over the last month.
Downward breakoutA breakout occurs when price closes below the lowest low posted on the announcement day.
VolumeAbove the 30-day average, usually.
MarketWorks best in a bear market.
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Bad Same-Store Sales: Trading Tips

Trading TacticExplanation
Measure ruleReference 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).
ConfirmationWait 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.
SellSell a long holding or short the stock after confirmation.
RepetitionAnother bad same-store sales announcement often follows the first one.
Yearly middlePatterns in the middle third of the yearly price range show the best performance.
BottomPrice may bottom quickly. Over 60% bottom in less than 2 weeks in a bull market, 57% in a bear market.
Same-store sales measure rule
The Measure Rule
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Bad Same-Store Sales: Example

Same-store sales event pattern 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

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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. In God we trust. All others we monitor. -- NSA