As of 10/07/2024
Indus: 41,954 -398.51 -0.9%
Trans: 15,783 -31.37 -0.2%
Utils: 1,027 -24.05 -2.3%
Nasdaq: 17,924 -213.95 -1.2%
S&P 500: 5,696 -55.13 -1.0%
|
YTD
+11.3%
-0.7%
+16.5%
+19.4%
+19.4%
|
 43,500 or 41,600 by 10/15/202416,800 or 15,700 by 10/15/20241,125 or 1,025 by 10/15/202419,000 or 17,600 by 10/15/20245,900 or 5,600 by 10/15/2024 |
As of 10/07/2024
Indus: 41,954 -398.51 -0.9%
Trans: 15,783 -31.37 -0.2%
Utils: 1,027 -24.05 -2.3%
Nasdaq: 17,924 -213.95 -1.2%
S&P 500: 5,696 -55.13 -1.0%
|
YTD
+11.3%
-0.7%
+16.5%
+19.4%
+19.4%
| |
|
43,500 or 41,600 by 10/15/202416,800 or 15,700 by 10/15/20241,125 or 1,025 by 10/15/202419,000 or 17,600 by 10/15/20245,900 or 5,600 by 10/15/2024 | ||
A stock rating upgrade by a broker is a bullish event, but only for a time. Price may breakout upward but it soon collapses. Discovered by Thomas Bulkowski in the fall of 2003.
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Encyclopedia of Chart Patterns Second Edition
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Stock Rating Upgrade Pattern
|
| Characteristic | Discussion |
| Announcement | A broker publicly upgrades the stock. |
| Wide swing | Look 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 breakout | The breakout is usually upward, and it occurs when price closes above the high made on the announcement day. |
| Downward breakout | Downward breakouts occur when price closes below the announcement day's low. |
| Volume | Heavy on the announcement day. |
| Behavior | For upward breakouts, price rises, rounds over, and then declines. For downward breakouts, price drops but pulls back almost half the time. |
Do not trade this in a bear market; it's the worst performing event pattern. Upward breakouts see price rise but only for a time. Downward breakouts have a tendency to bottom in less than 2 weeks, so they are not good short candidates either.
| Trading Tactic | Explanation |  The Measure Rule
|
| Measure rule | See the Measure Rule figure to the right. Using the announcement day, subtract the intraday low (point B) from the high (A) and multiply the difference by the above “percentage meeting price target.” Add the result to the intraday high (A) for upward breakouts, or subtract it from the intraday low (B) for downward breakouts to get a price target (C, shown for upward breakouts only). | |
| Confirmation | Price confirms the pattern when it closes above the announcement day high, or closes below the announcement day low. Wait for price to confirm the pattern because the breakout can be in any direction. | |
| Buy | After a downward breakout, price should bottom and then begin moving up. When that happens, buy, but be aware that it may be a pullback and price may tumble once the pullback completes. | |
| Sell | After an upward breakout, price peaks and turns down. If that happens, sell or sell short. |
The above figure shows an example of a stock rating upgrade event pattern. On August 9, a broker raised its rating on the stock. The stock closed above the intraday high posted on the day of upgrade 3 days later, signaling an upward breakout. Price rounded over and headed lower, bottoming 22% below the close on the upgrade day.
-- Thomas Bulkowski
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