For anticipating a breakout I look for following:
- stock should have established momentum (it should be in uptrend)
- should have linear moves
- as far as possible should not be up 3 days in a row with 5% plus moves
- should have orderly low volatility pullback or sideways consolidation
- As far as possible consolidation should have series of narrow range day
SEM is an example of that kind of setup. It has 14 days of sideways consolidation. Yesterday was narrow range day. This kind of setup if it breaks out with high volume can offer 8 to 20% opportunity in 3 to 5 days. It can also breakdown to downside.
Here are more stocks like SEM I am watching for possible breakout in next few days:
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