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. His four books, including the best selling Encyclopedia of Chart Patterns, have been translated into seven languages. He may be reached at

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Bulkowski's Best Chart Patterns

Market

Industrials (^DJI):

Transports (^DJT):

Utilities (^DJU):

Nasdaq (^IXIC):

S&P 500 (^GSPC):

As of 05/16/2012

12,599 -33.45 -0.3%

5,101 -6.43 -0.1%

467 -0.66 -0.1%

2,874 -19.72 -0.7%

1,325 -5.86 -0.4%

YTD

3.1%

1.6%

0.6%

10.3%

5.3%

Tom's Targets Overview: 05/14/2012

13,300 or 12,500 by 06/01/2012

5,400 or 5,000 by 06/01/2012

480 or 460 by 06/01/2012

3,000 or 2,850 by 06/01/2012

1,420 or 1,310 by 06/01/2012

Test Portfolios and CPI

Indus. strength: 11.1%

Mutt Losers: -4.2%

Mutt Winners: 2.3%

Wilder RSI: -2.5%

CPI:

on 05/02/2012

Pattern: Up Breakouts	1 Month Gain	2 Month Gain	3 Month Gain
High and tight flags	22%	21%	21%
Eve & Eve double bottom	9%	12%	13%
Scallop, ascending and inverted	11%	12%	13%
Rectangle Bottom	8%	11%	14%
Adam & Adam double bottom	7%	10%	12%
Adam & Eve double bottom	7%	10%	10%
Eve & Adam double bottom	7%	10%	14%
Falling wedge	8%	10%	9%
Rounded top	7%	10%	14%
Flag	8%	9%	7%
Pattern: Down Breakouts	1 Month Loss	2 Month Loss	3 Month Loss
Complex head-and-shoulders top	-8%	-10%	-10%
Head-and-shoulders top	-7%	-8%	-7%
Diamond top	-8%	-7%	-6%
Diamond bottom	-10%	-5%	-4%
Scallop, descending	-6%	-5%	-4%
Adam & Adam double top	-6%	-4%	-3%
Right-angled and descending broadening formation	-5%	-4%	0%
Rounded top	-6%	-4%	-4%
Scallop, descending and inverted	-4%	-4%	-4%
Triangle, descending	-5%	-4%	-3%

The table shows the best performing chart patterns for upward breakouts (top half) and downward breakouts (bottom half), sorted by the 2 month's performance.

I scanned my database of chart patterns (the popular ones) and found over 30,000 samples. Then I measured the price move 1, 2, 3 and 6 months after the breakout. However, I show only a maximum of 3 months in the table.

This measurement technique is different than the one I used in my books. There, I measured the move assuming a perfect trade, from breakout to ultimate high or low (after which price dropped or rose by at least 20%).

This table is just another way of slicing the same information. However, it does contain surprises.

Notice that the cup with handle doesn't appear in the list. That's because performance is poor -- it ranked 11th, so it didn't make the top 10.

Click on the associated link for more information about a chart pattern.

-- Thomas Bulkowski

Bulkowski's Best Chart Patterns

See Also