Guide · Trend following
Does Granville 200-Day work?
Across 374 stocks, Granville 200-Day cut the worst fall on 87%, beat buying and holding on risk-adjusted return on 29% and on raw return on 20%. Mainly a seatbelt: it softened the big falls on most stocks, but usually gave up return to do it.
What it predicts
Granville's first buy rule and fifth sell rule: buy when price is above a 200-day average that has stopped falling, sell when it drops below.
- In when a daily close is above the 200-day average and that average is flat or higher than 20 days ago.
- Out when a daily close is below the 200-day average.
Trend following plays bet that prices that have been rising tend to keep rising for a while, and falls tend to keep falling. The family guide
How to use it
- Expect to be wrong more often than right: only 15% of its calls worked. Its results come from the size of the winners, so following it means sitting through strings of small losses.
- It worked best on Media & telecom (60% beat holding on risk-adjusted return) and worst on Healthcare (17%).
- Use it as one input. Your signal combines the plays you count with the other factors you weight into one call.
When it worked
Granville 200-Day did best against holding in the 2008 crash (+35% median gap) and worst in the 2020–21 rally (−24%). Median gap in return against holding the same stock (per year over stretches longer than 18 months; crypto excluded).
| 2008 crash | Recovery 2009–19 | COVID drop | 2020–21 rally | 2022 bear | Since Oct 2022 | |
|---|---|---|---|---|---|---|
| Granville 200-Day | +35% | −9% | +15% | −24% | +9% | −9% |
Where it worked
By kind of stock: how often it beat holding on risk-adjusted return, and the median Sharpe ratio gap.
| Group | Beat holding, risk-adjusted | Sharpe gap |
|---|---|---|
| Media & telecom | 60% | +0.01 |
| Real estate | 53% | +0.00 |
| Software & devices | 38% | -0.10 |
| Energy & power | 36% | -0.07 |
| Financials | 35% | -0.04 |
| Indexes & ETFs | 29% | -0.04 |
| Industrials & materials | 27% | -0.09 |
| Sectors | 25% | -0.03 |
| Industrials & rentals | 22% | -0.19 |
| Consumer & retail | 18% | -0.17 |
| Metals & mining | 18% | -0.19 |
| Semiconductors | 17% | -0.10 |
| Big tech | 17% | -0.18 |
| Healthcare | 17% | -0.12 |
Where it helped most
Sharpe ratio gap against holding, stocks with 3+ years of history
Right now
Granville 200-Day holds 186 of 377 names as of the Oct 13, 2026 close.
Changed its call in the last two weeks:
Backtest results since 2005 (or as long as each stock has traded), against holding the same stock over the same dates, after 0.05% per switch. Past results don't promise future ones. This analysis does not constitute trading advice. Please meet with an advisor or independently review sources before making any decision.