Contrarian bottom

Bullish

Cheap after selloff + accounting looks clean + price action just stopped falling. Overreaction fading.

PRIMARY SOURCE
De Bondt-Thaler 1985
Lakonishok-Shleifer-Vishny 1994
TYPICAL HORIZON
6-12 months
FACTORS USED
valueaccrualsmomentum

What it means

The stock has been beaten down (that's why valuation is low), but the accounting quality is still OK — meaning the fundamental business isn't actually broken. Price action is starting to stabilise. Classic overreaction mean-reversion setup.

Why it works

De Bondt-Thaler 1985 documented that the worst-performing stocks in one period systematically outperform in the next, driven by sentiment overshoot. LSV 1994 showed the effect is strongest when the "cheap" stocks also pass a quality screen.

Watch out

Timing matters. Catching a falling knife before momentum stabilises is the most common failure. The pattern is disabled in pure bear regimes (risk_off) because the base rate of further declines is too high.

Live matches

7 tickers firing right now
TickerCompanySectorChangeScore
GPNGlobal PaymentsTechnology-2.38%67[5–95]CTVACorteva Inc.Basic Materials-5.17%66[5–95]8306.TMitsubishi UFJ FinancialFinancial Services-1.17%65[5–95]GRMNGarmin Ltd.Technology-0.46%65[5–95]MUMicron TechnologySemiconductors-2.05%62[9–95]HESAYHermès InternationalConsumer+1.15%61[5–95]4911.TShiseido CompanyConsumer Defensive-4.31%58[5–95]
Disclaimer. Pattern matches are research signals, not investment advice. Past performance of an academic effect does not guarantee future returns. Forward-return tracking for Framler's own implementation begins 2026-05-16 after the calibration window closes.
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