As of 02/21/2024
  Indus: 38,612 +48.44 +0.1%  
  Trans: 15,582 +118.68 +0.8%  
  Utils: 854 +11.76 +1.4%  
  Nasdaq: 15,581 -49.91 -0.3%  
  S&P 500: 4,982 +6.29 +0.1%  
YTD
 +2.4%  
-2.0%  
-3.1%  
 +3.8%  
 +4.4%  
  Targets    Overview: 02/13/2024  
  Down arrow37,700 or 39,000 by 03/15/2024
  Up arrow16,400 or 15,400 by 03/01/2024
  Up arrow870 or 800 by 03/01/2024
  Down arrow15,000 or 16,400 by 03/15/2024
  Down arrow4,850 or 5,100 by 03/15/2024
As of 02/21/2024
  Indus: 38,612 +48.44 +0.1%  
  Trans: 15,582 +118.68 +0.8%  
  Utils: 854 +11.76 +1.4%  
  Nasdaq: 15,581 -49.91 -0.3%  
  S&P 500: 4,982 +6.29 +0.1%  
YTD
 +2.4%  
-2.0%  
-3.1%  
 +3.8%  
 +4.4%  
  Targets    Overview: 02/13/2024  
  Down arrow37,700 or 39,000 by 03/15/2024
  Up arrow16,400 or 15,400 by 03/01/2024
  Up arrow870 or 800 by 03/01/2024
  Down arrow15,000 or 16,400 by 03/15/2024
  Down arrow4,850 or 5,100 by 03/15/2024

Bulkowski on Market Cap versus Performance

Do small cap stocks outperform big caps? Yes. This study takes a closer look.

Background
Details
Results
See Also

 

Market Cap: Background

Market capitalization is the number of shares outstanding multiplied by the stock price (or in this case, the chart pattern breakout price). I classify capitalization into three categories: small cap stocks (up to $1 billion), mid caps ($1 billion to $5 billion), and large caps (over $5 billion).

Market Cap: Details

I measured the rise from the breakout price to the ultimate high (the highest high before price tumbled by at least 20%), or the decline to the ultimate low (the lowest low before price climbed by at least 20%). Then I sorted the stocks by market capitalization. I found that chart patterns in small cap stocks performed best, followed by mid caps, and then large caps.

For example, price after a head-and-shoulders bottom climbed an average of 42% in 154 samples taken from small cap stocks. Mid cap stocks (147 samples) climbed 33%, on average, after the breakout and large caps climbed 27% (64 samples) post breakout. Thus, small caps outperformed followed by mid and large cap stocks, respectively.

For more information (time period covered, sample size and so on), refer to my book, Trading Classic Chart Patterns. It shows the percentage rise or decline for each pattern, sorted by capitalization.

Top of page

Market Cap: Results

Nineteen patterns perform best in small cap stocks.

Six patterns perform best in mid cap stocks

Three patterns perform best in large cap stocks

-- Thomas Bulkowski

Top of page

See Also

 

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My novels:  Remember Me book Bumper's Story book Head's Law book
My stock market books:  Chart Patterns: After the Buy Getting Started in Chart Patterns 2nd edition book Trading Basics book Fundamental Analysis and Position Trading book Swing and Day Trading book Encyclopedia of Chart Patterns 3rd Edition book

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