What to look for in good breakout anticipation candidate | stockbee

6/27/2014

What to look for in good breakout anticipation candidate

I am primarily a breakout trader and it works for me. It has helped me build a big fortune in last 14 years so I stick with it.

As a breakout trader I look for area of consolidation or weakness from which stock is likely to breakout.

Not all breakouts can be anticipated, but some can be .

What to look for in good breakout anticipation candidate
  • series of narrow range days in pullback/consolidation
  • orderly pullback with no 4% b/d during the pullback or consolidation
  • low volume pullback
  • low volatility during pullback
  • linear first leg if looking as continuation setup
  • Stock should go up smoothly and not in volatile manner
  • 3 to 10 days consolidation/pullback
  • not up 3 days in a row

Some good anticipation candidates

CNQR
EPAM
INCY
MNKD
NBIX
OEH
RCPT
RDNT
SGMO
ULTI
WAGE
XOOM

4 comments:

Allan said...

Hi Pradeep, thanks for all your hard work on the blog, I have learned a lot from you. When you look for breakouts, what is your methodology for entering? Do you monitor the stocks in the morning and enter after a certain price point? For example today OEH appears to have broken out, did you enter? When? and what were the signals that alerted you to enter a trade? Thank you again.

Pradeep Bonde said...

I did not enter OEH today as I was away part of the day but yes I would have entered it. i enter it as soon as it shows a little move above recent high. i like entering in the morning. That way you can benefit from rest of the day move.

Michael Rudelich said...

What do you mean by the following: "orderly pullback with no 4% b/d during the pullback or consolidation." What is b/d? Don't quite follow your grammar. Could you restate?

Thanks for the daily newsletters. Very helpful. Most interested in those addressing trading principles and strategies, rather than specific stocks. I Day Trade the Russell 2000 and breakouts and reversals are crucial points of entry. Thanks again.

Pradeep Bonde said...

Stock should not have 4% plus down day during its consolidation phase