What to look for in good breakout anticipation candidate

June 27, 2014

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 :

  1. AllanJun 27, 2014, 4:54:00 PM

    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.

    ReplyDelete
  2. Pradeep BondeJun 27, 2014, 5:41:00 PM

    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.

    ReplyDelete
  3. UnknownJun 27, 2014, 8:45:00 PM

    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.

    ReplyDelete
  4. Pradeep BondeJun 27, 2014, 8:57:00 PM

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

    ReplyDelete

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