How to find stocks like CALA and enter them before breakout

CALA was a stock I highlighted today morning before market open as good anticipation setup. As you can see the stock is up 28% in a day. Do you want to find stocks like these daily and enter before they breakout?

Here is the entry trade on Tuesday afternoon before breakout on CALA (800 shares bought for  9 USD in 50k account with end of the day stop at 8.80 for a risk of $160 risk)



I sold my CALA position by end of the day as it gave above normal profit in just one day.

The following scans and steps details the method to find these kind of stocks for those interested in making real money trading. The scans are using Telechart software.

To anticipate a breakout look at stocks currently not undergoing momentum burst.

Stock should be in extremely low momentum phase for anticipation .

It can be a shallow pullback or consolidation in established momentum phase.

To anticipate look for stock with extremely low volatility

A stock with low volatility in last 5 to 10 days is ideal candidate as part of a continuation setup.

Look for series of low range bars in last 5 to 10 days

Look for stocks with bollinger band squeeze.

Avoid Anticipation setups on extended stocks

First or second anticipation setup in established trend is best

Extended trends needs to be avoided for anticipation as failure is high on them

Look for early entry on anticipation candidates

Anticipating a breakout helps you get an early entry and can improve your per trade profits.

It also can lower your risk as your stop is closer.

It can help you profit from even smaller moves.

For that entry without waiting for breakout is best.

Anticipation requires more pre planning and effort than buying a breakout.

You need a process flow to do that.

The process should be efficient and done daily after the market close.

The suggested process flow is a template you can develop your own process.

Only 3 to 5 quality ideas should be tracked

"A" grade pre Momentum Burst setup should be your first priority

Once you have list of anticipation setups narrow them down to 1 to 5 for next day action.

Quality is more important than quantity

In order to find Bullish Anticipation setup use DT and TI 65 lists in Telechart

Double Trouble Scan

US common stocks

c/minl252>=1.8 and minv3.1>=100000

Price % change Today between 1 to -1%

TI65

US Common stocks

avgc7/avgc65>1.05 and minv3.1>100000

Price % change Today between 1 to -1%

MDT Above 1.19

US Common stocks

c/avgc126>1.19 and minv3.1>100000

Price % change Today between 1 to -1%

After running these three scan merge them together as some stocks will be common.

Go through the list to find setups that are setting up for possible b/o

What to look for in good anticipation setup

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

This entire process once setup tales just 20 minutes daily. 

You can find 5 to 10 good set ups using this process daily. In good market conditions these setups can make 8 to 20% in just few days. 

So if you are serious about making money swing trading setup these scans and practice finding good setups.

You can find your own stock picks daily once you master this method and perfect it. It will help you develop your own trading skill  and you will not have to depend on anyone.