I will share interesting trading patterns regularly and hopefully these patterns can give you some ideas.
Today I start from Cisco Systems (CSCO) which showed a moderately bullish historical setup after a strong 20-day move. I have already highlighted the setup in the chart. Similar setup has been seen 29 times across 29 unique S&P500 symbols in the past 20 years.
CSCO matched with historical setups from West Pharmaceutical Services, United Rentals, Target, Broadcom, Teledyne, TransDigm, Global Payments, Workday, Netflix, Micron, CDW, and American Express. These matches came from healthcare suppliers, industrial equipment, retail, semiconductors, aerospace, payments, software, media, and financial services.
The cross-market mix is important because CSCO is a networking technology company, yet its closest historical analogs were not limited to networking or enterprise hardware. I found similar market structures across very different types of businesses.
That suggests the pattern may reflect broader market behavior after strong repricing events, not only Cisco-specific fundamentals.
When these similar setups observed in the data, they finished positive 86.2% of the time over the next 5 trading days. Average 5 days return was +1.5%, while median return was +1.6%.
The positive return rate was very high, and the average and median were closely aligned. That is encouraging from a distribution standpoint. The 25th percentile was +0.6%, the median was +1.6%, and the 75th percentile was +3.4%. That means even the lower-middle portion of the historical distribution was positive.
The broad 10th to 90th percentile range ran from -1.2% to +3.9%, which looks relatively contained. But the worst historical outcome was -8.7%, and maximum adverse excursion reached -11.7%.
So make sure the tail risk is managed well. The worst historical 5-day outcome was -8.7%, far larger than the median gain of +1.6%. This creates an asymmetry problem: the usual historical case was constructive, but the adverse historical exception was large.
With these historical cross-market evidence, would you trade today's CSCO setup?
PS: A similar setup is a historical period where price action, trend, volatility, momentum, volume behavior and broader market context look statistically close to today's conditions. I compare the full setup, not just one indicator. I used 20 days as the lookback window and 5 days for the look forward window.
Today I start from Cisco Systems (CSCO) which showed a moderately bullish historical setup after a strong 20-day move. I have already highlighted the setup in the chart. Similar setup has been seen 29 times across 29 unique S&P500 symbols in the past 20 years.
CSCO matched with historical setups from West Pharmaceutical Services, United Rentals, Target, Broadcom, Teledyne, TransDigm, Global Payments, Workday, Netflix, Micron, CDW, and American Express. These matches came from healthcare suppliers, industrial equipment, retail, semiconductors, aerospace, payments, software, media, and financial services.
The cross-market mix is important because CSCO is a networking technology company, yet its closest historical analogs were not limited to networking or enterprise hardware. I found similar market structures across very different types of businesses.
That suggests the pattern may reflect broader market behavior after strong repricing events, not only Cisco-specific fundamentals.
When these similar setups observed in the data, they finished positive 86.2% of the time over the next 5 trading days. Average 5 days return was +1.5%, while median return was +1.6%.
The positive return rate was very high, and the average and median were closely aligned. That is encouraging from a distribution standpoint. The 25th percentile was +0.6%, the median was +1.6%, and the 75th percentile was +3.4%. That means even the lower-middle portion of the historical distribution was positive.
The broad 10th to 90th percentile range ran from -1.2% to +3.9%, which looks relatively contained. But the worst historical outcome was -8.7%, and maximum adverse excursion reached -11.7%.
So make sure the tail risk is managed well. The worst historical 5-day outcome was -8.7%, far larger than the median gain of +1.6%. This creates an asymmetry problem: the usual historical case was constructive, but the adverse historical exception was large.
With these historical cross-market evidence, would you trade today's CSCO setup?
PS: A similar setup is a historical period where price action, trend, volatility, momentum, volume behavior and broader market context look statistically close to today's conditions. I compare the full setup, not just one indicator. I used 20 days as the lookback window and 5 days for the look forward window.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.