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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 Good Same-Store Sales

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Market
Industrials (^DJI):
Transports (^DJT):
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Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 01/13/2017
19,886 -5.27 0.0%
9,202 57.87 0.6%
657 -0.99 -0.2%
5,574 26.63 0.5%
2,275 4.20 0.2%
YTD
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3.5%
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19,250 or 20,250 by 01/15/2017
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625 or 690 by 01/15/2017
5,650 or 5,400 by 01/15/2017
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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 921 to 933.

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Periodically, retailers announce same-store sales (sometimes called existing store sales or comparable store sales) numbers. Usually, these are the sale results for stores open at least a year. After the announcement of better than expected same-store sales, the stock jumps up, but price soon falters and drops. Discovered by Thomas Bulkowski in the fall of 2003.

Good same store sales
Good Same Store Sales

 

Good Same-Store Sales: Important Bull Market Results

Overall performance rank for up breakouts (1 is best): 4 out of 6
Break even failure rate for up breakouts: 20%
Average rise: 23%
Throwback rate: 59%
Percentage meeting price target for up breakouts: 82%

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

Good Same-Store Sales: Identification Guidelines

CharacteristicDiscussion
Price trendUsually found in a price uptrend (continuation patterns) but reversals perform better.
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 intraday price swing over the last month.
Upward breakoutA breakout occurs when price closes above the highest high posted on the announcement day.
VolumeAbove the 30-day average, usually.
MarketWorks best in a bull market.
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Good 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 A) from the high (B) and multiply it by the above “percentage meeting price target.” Add the result to the intraday high (B) to get a price target (C).
ConfirmationWait for price to confirm the pattern because traders may push price down instead. An upward breakout (confirmation) happens when price closes above the high posted on the announcement day.
BuyBuy when the pattern confirms, but be prepared to sell quickly.
Yearly lowPatterns with breakouts within a third of the yearly low have the best performance.
TopPrice may top out quickly. Forty-four percent in a bull market top out in less than 2 weeks, so be prepared to sell if price falters. Twenty-nine percent show continued upward strength through 70 days.
ShortIf price begins weakening, rounds over and starts down, consider shorting the stock. Watch for a throwback in which the stock returns to the breakout price and then rebounds upward.
Same-store sales measure rule
The Measure Rule
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Good Same-Store Sales: Example

Same-store sales event pattern example

The above figure shows an example of a good same-store sales event pattern. Price trends downward into the event pattern and then price forms a tall white candle on the announcement day. Price moves up in a straight-line run, peaking at A before dribbling lower over the coming days.

-- 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. Yes, we have backups. Do you want last year's or the year before?