As of 04/17/2024   Indus: 37,753 -45.66 -0.1%     Trans: 14,987 -259.68 -1.7%     Utils: 853 +17.82 +2.1%     Nasdaq: 15,683 -181.88 -1.1%     S&P 500: 5,022 -29.20 -0.6%	YTD  +0.2%   -5.7%   -3.2%    +4.5%    +5.3%	Targets    Overview: 04/12/2024     39,800 or 37,150 by 05/01/2024   16,200 or 15,000 by 05/01/2024   885 or 850 by 05/01/2024   16,700 or 15,800 by 05/01/2024   5,250 or 5,025 by 05/01/2024
Chart Pattern Indicator: on 4/1/24

As of 04/17/2024   Indus: 37,753 -45.66 -0.1%     Trans: 14,987 -259.68 -1.7%     Utils: 853 +17.82 +2.1%     Nasdaq: 15,683 -181.88 -1.1%     S&P 500: 5,022 -29.20 -0.6%	YTD  +0.2%   -5.7%   -3.2%    +4.5%    +5.3%
Targets    Overview: 04/12/2024     39,800 or 37,150 by 05/01/2024   16,200 or 15,000 by 05/01/2024   885 or 850 by 05/01/2024   16,700 or 15,800 by 05/01/2024   5,250 or 5,025 by 05/01/2024
Chart Pattern Indicator: on 4/1/24

Bulkowski on 10 New Price Lines

My book, Encyclopedia of Candlestick Charts, pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

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The 10 new price lines candle pattern is as it sounds: ten candle lines in a row, each with a high higher than the previous one. It is supposed to act as a bearish reversal and it does, but only 51% of the time in a bull market. That is about random. In a bear market, it acts as a continuation pattern, too.

Overall performance ranks 100th out of 103 candle patterns and that isn't good. It suggests the trend after the breakout is short lived.

10 New Price Lines: Important Results

Theoretical performance: Bearish reversal Tested performance: Bearish reversal 51% of the time Frequency rank: 69 Overall performance rank: 100 Best percentage meeting price target: 93% (bear market, down breakout) Best average move in 10 days: -1.95% (bear market, down breakout) Best 10-day performance rank: 83 (bear market, down breakout) All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts. The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

10 New Price Lines

10 New Price Lines: Discussion

The 10 new price lines candle pattern acts as a bearish reversal both in theory and reality but just barely. Price reverses just 51% of the time. That is really random because you will not be able to say with any certainty that price will reverse. What's worse is the overall performance rank: 100 where 103 is worst and 1 is best. Yuck.

With the new lines candles, 8, 10, 12 and 13, I determine the breakout direction using the last candle line in the pattern. A close above the top or a close below the bottom of it would constitute an up or down breakout, respectively. The measure rule (percentage meeting price target) is based on taking the height of the move from the first to last candle in the pattern and dividing by 6 for upward breakouts or 3 for downward breakouts. The reason for this is because the pattern can be quite tall and using the full height would set an almost impossible target.

Price meets the target after a downward breakout in a bull market 93% of the time. The best average move 10 days after a breakout is a drop of just 1.95% in a bear market. A good move would be a drop of 6% or more, so this falls short. The ranking of the decline is 83, well behind the first place rank of 1.

10 New Price Lines: Identification Guidelines

10 New Price Lines: Three Trading Tidbits

If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.

1. 10 new price lines candles that appear within a third of the yearly low perform best for upward breakouts -- page 40.
2. 10 new price lines acting as reversals occur most often within a third of the yearly low -- page 44.
3. Volume gives performance clues -- page 42.

10 New Price Lines: Example

The chart shows the 10 new price lines candlestick pattern on the daily scale, points 1 through 10. Since price continues higher, it also shows 12 and 13 new price lines candlesticks as well as the 8 line variety. Notice how none of them act as reversal patterns either. Price just keeps moving up until day 15. After that, price drops, but only for a few days before the uptrend continues.

Based on this chart, and many others like it, to say that price will reverse after 8, 10, 12 or 13 days of higher highs is just guessing. If that were the case, then there would be no 12 or 13 new price lines candle patterns.

-- Thomas Bulkowski

See Also

• 8 new price lines is the new kid on the block.
• 12 new price lines has two more lines than the 8 line version.
• 13 new price lines is the end of the line.
• If you prefer candlesticks, then visit over 100 of them in the alphabetical index.
• Click to view the visual candlestick index to make identification easier.

 

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