When FTDs Occur In Conjunction With 20-Day Highs

I discussed the other day that there has never been a Follow Through Day (FTD) that occurred AFTER a new 50-day high. There has also never been a FTD that occurred in conjunction with a new 50-day high. These things changed on Tuesday since the move up was also accompanied by an increase in volume. But there have been some FTDs that occurred in conjunction with 20-day highs. Below is a new study that shows how they fared.

Results here are impressive over both the short and intermediate-term. To get a better feel for the short-term returns I have listed the instances below.

The run-up to drawdown ratio here is quite impressive. I’ll also note that 7 of the 10 instances went on to have “successful” rallies. (“Success” means it either hit a new 200-day high or at least rose 2x as much as it had already risen off the bottom.) The 3 instances whose rallies did not succeed (circled in red) all saw run-ups of at least 2% before they eventually rolled over and made new lows.

More information on FTDs may be found here.
Positive aspects to this one include the strong breadth and the fact that it came after day 10.
Some obstacles to success include the fact that it is occurring under the 200ma and it is occurring after a substantial market decline.