As of 06/01/2020
  Indus: 25,475 +91.91 +0.4%  
  Trans: 8,966 -3.88 0.0%  
  Utils: 815 +8.41 +1.0%  
  Nasdaq: 9,552 +62.18 +0.7%  
  S&P 500: 3,056 +11.42 +0.4%  
YTD
-10.7%  
-17.8%  
-7.3%  
 +6.5%  
-5.4%  
  Targets    Overview: 05/29/2020  
  Up arrow27,000 or 24,000 by 06/15/2020
  Up arrow9,800 or 8,200 by 06/15/2020
  Up arrow850 or 750 by 06/15/2020
  Up arrow9,800 or 9,000 by 06/15/2020
  Up arrow3,200 or 2,850 by 06/15/2020
CPI (updated daily): Arrows on 5/15/20
As of 06/01/2020
  Indus: 25,475 +91.91 +0.4%  
  Trans: 8,966 -3.88 0.0%  
  Utils: 815 +8.41 +1.0%  
  Nasdaq: 9,552 +62.18 +0.7%  
  S&P 500: 3,056 +11.42 +0.4%  
YTD
-10.7%  
-17.8%  
-7.3%  
 +6.5%  
-5.4%  
  Targets    Overview: 05/29/2020  
  Up arrow27,000 or 24,000 by 06/15/2020
  Up arrow9,800 or 8,200 by 06/15/2020
  Up arrow850 or 750 by 06/15/2020
  Up arrow9,800 or 9,000 by 06/15/2020
  Up arrow3,200 or 2,850 by 06/15/2020
CPI (updated daily): Arrows on 5/15/20

Bulkowski on Trendiness

 

This article discusses trendiness. What is trendiness? It describes how often price trends after the breakout from a chart pattern.

This type of information is most useful for swing traders because they want to catch the move after the breakout when price begins to trend. The below rankings will help swing traders select chart patterns that typically lead to strong trends.

Trendiness Summary

I measured the move from the close the day before a chart pattern breakout to the first minor high or minor low. These are typically short moves before a throwback or pullback occurs.

The top performing chart patterns with upward breakouts are (click on the link for more information):

  1. Flag, high and tight
  2. Flag
  3. Diamond bottom
  4. Pennant
  5. Rectangle bottom

For downward breakouts, the best decliners are (click on the link for more information):

  1. Diamond bottom
  2. Inverted cup with handle
  3. Big W
  4. Scallop, descending
  5. Rounding top

Top of page

Trendiness Background

Several years ago, I received an email asking about an idea called trendiness. That is, which chart patterns result in price trending after the breakout?

I did some research to answer that question and this article shares those results.

Trendiness Methodology

I used my database of chart patterns and scanned it for confirmed patterns that dated as far back as April 1989 and as recent as October 2011 (I conducted the study on June 27, 2012). I found 37,594 patterns.

For each pattern, I found the nearest minor high or minor low after the breakout. To do that, I found the first minor high that was above any higher peak within five days (five days before to five days after, for a total of 11 days). The same applied to minor lows -- the lowest low within five days (11 days total).

Then, I measured the price change from the closing price the day before the breakout (to catch any breakout day gaps) to the high at the minor high or the low at the minor low.

I averaged the results for each pattern type and show those below.

Top of page

Trendiness: Upward Breakout Results

The following table shows the results for upward breakouts only. Low sample counts are shown highlighted in red. Distrust the associated performance.

Trends From Upward Breakouts in Chart Patterns
RankGainSamplesPattern
Best30.57%520Flag, high and tight
215.77%373Flag
313.96%267Diamond bottom
412.80%450Pennant
512.50%375Rectangle bottom
612.42%464Rounding bottom
712.21%759Double Bottom, Eve and Eve
811.84%522Three Rising Valleys
911.76%772Double Bottom, Adam and Adam
1011.71%764Triangle, descending
1111.70%740Double Bottom, Adam and Eve
1211.66%532Falling wedge
1311.45%1,605Head-and-shoulders bottom
1411.44%968Triple bottom
1511.39%844Scallop, ascending and inverted
1611.37%183Diamond top
1711.28%478Double Bottom, Eve and Adam
1810.97%209Broadening top, right-angled and ascending
1910.95%1,138Scallop, ascending
RankGainSamplesPattern
2010.94%405Rounding top
2110.94%532Bump-and-run reversal, bottom
2210.64%509Broadening wedge, descending
2310.58%1,811Triangle, symmetrical
2410.20%642Rectangle top
2510.17%375Scallop, descending
269.88%501Cup with handle
279.42%487Head-and-shoulders complex bottom
289.41%218Big W
299.40%507Broadening top
309.16%273Broadening bottom
319.11%566Ugly double bottom
328.95%1,057Triangle, ascending
338.93%128Broadening wedge, ascending
348.73%265Broadening top, right-angled and descending
358.56%33Roof
368.33%101Roof, inverted
Worst7.89%403Rising wedge
RankGainSamplesPattern

Top of page

Trendiness: Downward Breakout Results

The following table shows the results for downward breakouts only. Low sample counts are shown highlighted in red. Distrust the associated performance.

Trends From Downward Breakouts in Chart Patterns
RankLossSamplesPattern
1-21.58%109Diamond bottom
2-15.91%433Inverted cup with handle
3-15.71%92Big W
4-15.53%728Scallop, descending
5-15.13%360Rounding top
6-14.78%312Flag
7-14.30%151Broadening wedge, descending
8-13.87%529Three Falling Peaks
9-13.04%786Double Top, Eve and Eve
10-12.75%262Falling wedge
11-12.69%198Broadening bottom
12-12.52%545Double Top, Adam and Adam
13-12.42%776Bump-and-run reversal, top
14-12.31%317Diamond top
15-12.27%505Double Top, Adam and Eve
16-12.23%298Pennant
17-11.72%450Head-and-shoulders complex top
18-11.71%501Double Top, Eve and Adam
RankLossSamplesPattern
19-11.70%740Scallop, descending and inverted
20-11.66%1,034Triple top
21-11.13%1,677Head-and-shoulders top
22-11.13%100Roof, inverted
23-10.88%338Rectangle bottom
24-10.73%856Triangle, descending
25-10.51%282Scallop, ascending
26-10.24%348Broadening top, right-angled and ascending
27-10.05%430Broadening top
28-9.94%1,287Triangle, symmetrical
29-9.49%331Rectangle top
30-9.34%592Triangle, ascending
31-9.30%51Cup with handle
32-9.20%170Roof
33-9.12%746Rising wedge
34-8.40%193Broadening top, right-angled and descending
35-7.70%271Broadening wedge, ascending
RankLossSamplesPattern

-- Thomas Bulkowski

Top of page

See Also

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

Copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved.
Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.
Some pattern names are registered trademarks of their respective owners.

Home Advertise Contact Donate Links Privacy/Disclaimer

On a clear disk, you can seek forever.Smiley