Price Growth Velocity and Future Correction Risk

Decision summary

Rapid 100%+ run-up signals had positive 12-month median return but elevated first-year drawdown risk. Use as entry sizing, not a standalone sell signal.

  • Future return potential: signal median 43.2% versus all-stock baseline 12.2% and EW broad index 16.0%.
  • Correction/drawdown risk: signal loss >20% probability 14.8% versus all-stock baseline 14.5% and EW broad index 5.0%.
  • Entry timing risk: measured by 10th percentile return -39.5% and median max drawdown -25.4%.
  • Use: classify entry condition, thesis condition, and current position before acting. Do not use price history alone as a Buy/Sell label.

Baseline comparison and distribution

Group Median return 25th pct 75th pct 10th pct downside Finished positive Loss >20% Loss >30% Loss >50% Median max drawdown Sample size
Rapid rise signal 43.2% 2.5% 108.8% -39.5% 77.1% 14.8% 11.9% 7.3% -25.4% 708
All eligible stocks 12.2% -7.6% 33.1% -27.5% 66.4% 14.5% 8.7% 2.8% -12.1% 64,257
EW broad index 16.0% 5.1% 24.2% -9.4% 81.9% 5.0% 2.9% 0.0% -6.2% 64,257
Signal excess vs all stocks 30.9% 0.4% 3.1% 4.6% -13.3%
Signal excess vs EW index 27.2% 9.8% 9.0% 7.3% -19.1%

Current ticker mapping

Ticker Current signal Historical median return Correction/loss risk Entry condition Suggested action
ACS 3m rapid rise 134% 43.2% 14.8% Elevated risk Use staged entry or position-size control
AMD 3m rapid rise 156% 43.2% 14.8% Favorable Use staged entry or position-size control
DD 1m rapid rise 188% 43.2% 14.8% Favorable Use staged entry or position-size control
DELL 3m rapid rise 128% 43.2% 14.8% Favorable Use staged entry or position-size control
FLEX 3m rapid rise 127% 43.2% 14.8% Favorable Use staged entry or position-size control
HET 3m rapid rise 101% 43.2% 14.8% Favorable Use staged entry or position-size control
HUM 3m rapid rise 121% 43.2% 14.8% Favorable Use staged entry or position-size control
INTC 3m rapid rise 191% 43.2% 14.8% Favorable Use staged entry or position-size control
MRVL 3m rapid rise 173% 43.2% 14.8% Favorable Use staged entry or position-size control
MU 3m rapid rise 219% 43.2% 14.8% Favorable Use staged entry or position-size control
OGN 3m rapid rise 123% 43.2% 14.8% Favorable Use staged entry or position-size control
OMX 3m rapid rise 119% 43.2% 14.8% Favorable Use staged entry or position-size control
QEP 3m rapid rise 160% 43.2% 14.8% Favorable Use staged entry or position-size control
STX 3m rapid rise 138% 43.2% 14.8% Favorable Use staged entry or position-size control
WDC 3m rapid rise 115% 43.2% 14.8% Favorable Use staged entry or position-size control
XRX 3m rapid rise 134% 43.2% 14.8% Favorable Use staged entry or position-size control

Action framework

Situation Suggested action
No position If entry condition is Favorable or Acceptable with staged entry and thesis condition is Intact, open a partial position. If entry condition is Elevated or Extreme risk, wait for consolidation or use smaller initial size.
Partial position Hold existing exposure and reserve cash for better entry unless thesis condition becomes Deteriorating.
Full position Do not add based only on the historical signal. Add only if entry condition improves and portfolio concentration allows it.
Overweight position Use the signal for sizing discipline. Consider rebalancing if entry risk is Elevated or Extreme.
Thesis deteriorating Reduce or avoid regardless of the historical price pattern.

What this signal does not mean

A high correction probability does not mean negative 12-month expected return. In this study it mainly identifies entry timing and position-size risk.

What changed since the previous report

Added all-stock and EW broad-index baselines, excess return/risk, distribution percentiles, current ticker mapping, and position-state actions.

Dataset disclosure

Universe: 953 stocks in the local database, adjusted daily prices from 2001-01-02 to 2026-06-26. Historical constituents are not reconstructed. Survivorship-bias risk exists. No liquidity/minimum-price filter beyond positive adjusted price. Signal cooldown: 63 trading days. Baseline: all eligible stock observations and EW broad index because SPY is unavailable.

Methodology note

The site is a historical base-rate and risk-management system. Historical results are not guaranteed predictions.