Finding breakout anticipation candidate | stockbee


Finding breakout anticipation candidate

Stocks move in sharp momentum bursts of 3 to 5 days. During that 3 to 5 day burst move they can go up 8 to 40%.

One way to trade these kinds of momentum bursts is to anticipate zones from which a likely momentum bust will occur. Or in other word look for a continuation setup.

Advantage of anticipation is you can get a very close entry on breakout . You can also create a predetermined buy order above the  consolidation area and enter.

JMBA , ACM , and TDG are three example of this kind of setups.

If you study these 3 setup , they all have common character. For last 8 to 20 days these stocks are not in momentum burst phase. They are in non momentum phase on smaller time frame. The volatility during the consolidation is low as these stocks have traded in very tight range.  Yesterday they had very small move up or down of less than .5%.

Stocks often breakout or breakdown from these kind of zones with burst moves and make big 3 to 5 days moves. In a year you can find and trade hundreds of setups like these.

Anticipation Setups watchlist


In order to generate above list I or Stockbee members go through around 300 stocks that have established trend. The 300 stocks are scanned for up or down move of less than 1%. That is the starting point for finding good anticipation candidates. From that 300 stocks list final 5 to 20 candidates are selected using guidelines I have developed for this setup.

Once the list is ready you can further narrow it down with other criteria like earnings, Zacks rank, valuation, sector , age of trend , float , price , capitalisation, short interest and so on. It might give you a small universe to focus on. But stocks need not have any reason for these kind of moves so just looking at quality of setup is enough.

Once the list is ready I start putting alerts on these stocks. I feed the list in my trading platform and set alert levels at which  a breakout move is likely to trigger. If the alert goes of then I buy the stock if capital is available.

In order to daily find stocks like these you need to setup everything. It takes me and members around 15 minutes daily to do this. once you get a hang of it you can scroll through charts rapidly and find the good setup very fast.

If you are really serious about making money trading you can do this yourself. If you are really serious about making money trading you can study hundreds of past moves to find what to look for in good anticipation setup. If you are really serious about making money you will figure out how to scan for these kind of stocks. If you are really serious about making money trading you will find many variations of this setup.

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