Learn how to picks Breakout Stock
There are many techniques to find good potential stocks for Day Trading | Stock
trading | breakout investment | trend trading | investing | long term investing
in
stock market,
In this section I show you how to Picks Breakout Stock for Stock trading, Day
Trading, Stock Investing or swing trading in
stock market.
What are Breakout stocks?
Technical analyst considering breakout stocks which are go through its strong Resistance
or strong Support is a Breakout stock. Here big question is How you know strong Resistance
or strong Support for stock, and it’s a right breakout or wrong breakout.
You can identify strong support or resistance by using different techniques that I show
you latter on. But simple techniques to identify resistance or support you can consider
nearest high picks or low picks of the stock price and when stock price cross above
this picks or below this picks analyst considering as a breakout of the particular stock.
You can identify stock given a right breakout or wrong breakout by using different
technical indicator analysis and identifying its trend and momentum. Once you know that
you can ride on breakout stock.
Down side (Bearish) Breakout of stock price can also be potentially good rewarding choice
for Day Trading | Stock trading | investing in stock market. If you have any question
related your Breakout stocks Picks send me feedback.
Does it ok to invest in Breakout stocks?
Properly identified breakout stocks may offer good return on
investing within short time frame like one to seven trading
sessions. It's a good choice for Trading.
It is not advisable to place all eggs in one basket because in case your decision goes
wrong you can loose all so to control risk factor it is advisable to diversify portfolio.
Before to consider breakout stock to play in stock market, it is very
important to know why suddenly demand increase or supply increase.
Here are some Reasons for Breakouts
Reasons for stocks to Breakout
To select Breakout stocks for investing or Day Trading you need to check some basic like:
- Surprise Quarterly result
- Company declare upside revision for earning expectation
- New development
- New management
- New product
- Stocks making new highs often get noticed by media
- Industry pressures due to some related events
- Acquisition interest from some good company
Potential Entry Points for Breakout Stocks Plays | investing |
Trading
Before choosing a Breakout stocks to play make sure that the stock continues its upward
(or downward for the bearish play) trend in the next trading session, also check short term
moving average is moving toward the breakout direction
to identify its trend and
Rate Of Change of Price (ROC)
or
Average Directional Movement Index (ADX) to
identify its momentum or you can use your favorites indicator to find out momentum of the
breakout stock. If stock gives up side breakout we need short term
moving average also moving in up side and for down
side breakout we need short term moving average
moving in down side.
Above I plot a chart for Google stock from Feb 2007 to Oct 2007 with 50 Days Simple moving
Average. As per chart Google stock had given a breakout on April 3rd with good volume. But with
this breakout there was stochastic in overbought territory and 50 day moving average
moving in down trend, that indicating its not right time to buy but in May 2007 it come
back to retest breakout point and this time stochastic given a buy signal with up
trend 50 Day moving average. This is a right buying point. I marked with up Arrow.
Applying this rule you can buy | invest in any stock. This is a key for breakout stock play.
Instead of STO you can use Rate of Change of price (ROC),
, Average Directional Movement Index (ADX) or any your favorite
technical indicator to confirm breakout it’s a real or trap.
Overall market conditions play an important part in determining the significance
of a Breakout stock play. A stock breaking out in an up market that more likely to go
upward and make a new high. A stock breaking out in a down market may struggle
to go more up but a stock that does continue on, in down trending markets may
explode upward when the down
stock market turns around.
This breakout theory is valid to do analysis of Index, Penny stocks, ETF or Futures.
Using this breakout theory with Index you can invest in 401k, IRA plan or any retirement
plan. To move money from high risk fund to low risk fund follow exit theory. Breakout
theory gives better result if you do research before to do any investment.
Potential Exit Points for Breakout Stocks Plays | investing |
Trading
Your exit point depends on your risk tolerance. You may want to consider a trailing
stop loss as your exit strategy. you may want to start with a stop loss at some
level below the previous days low and move it up if the stock moves up.
Above I plot a chart for Google from May 2008 to Sep 2008 with 50 Days Simple moving
Average. As per chart Google stock had given a down side breakout on Jun 26th with good volume.
But with this breakout there was stochastic in oversold territory and 50 day moving average
moving in up direction, that indicating its not right time to short sell but in July
2008 it come back to retest breakout point and this time stochastic given a Sell signal
with down trend 50 Day moving average. This is a right short sell entry point. I marked
with down Arrow. Applying this rule you can book profit | exit on invest | short sell
any stock for Day Trading | swing trading | Stock trading | investing.
With Breakouts, one of the best exit strategies is a closer pivot point, you can
consider Fibonacci number and also watch for 50MA, 100MA, 200MA.
Volume/Price Moves:
Only the stock choose those breakouts with high volume
(at least 250%) and that finished the day, near the top of their trading range
for the day. Volume is a important factor to consider Breakout stock for
day trading | Stock trading
| investing in
stock market
Some stocks taking rest for some days, once they hit the initial Breakout point
before they continue to climb upward | downward.
Stop loss: set a stop loss some level below the Breakout days low
It's a good idea to use some another technical indicator like:
On Balance Volume (OBV)
|
Percentage Price Oscillators (PPO)
|
Relative Strength Index (RSI)
|
Stochastic Oscillator (STO)
|
Commodity Channel Index (CCI)
|
Chalking Money Flow oscillator (CMF).
|
Rate Of Change (ROC)
|
Average Directional Movement Index (ADX)
with
Moving Average (MA)
to know
stock market in oversold or overbought condition. When we use two or three technical
indicators and in case of positive divergence and negative divergence it giving real good result,
only you need to change time span and find out which is a better pair for you.
Top Story:- Breakout stocks investing
Penny Stocks | Trading | stock market | stock trading | day trading | investing
Risk in Breakout stocks investing | Trading
While all investing involve risk, microcap | penny stocks are among the most risky. Many
penny stocks companies tend to be new and have no proven track record. Some of these
companies have no assets or operations. Others have products and services that are
still in development or have yet to be tested in the market. Consider plays on
only the best Breakout candidates. Many Breakout stocks just peak through the new
high or point of resistance and head back down.
You can trade any stocks but before to trade understand your risk. If you are quick enough to
take right decision and if there are still enough pressure built up | buying interest
then you can ride on the run up, and you should consider getting in and out the same
day - sometimes within an hour.
Breakout Stocks Recommendation
Breakout Stocks | Trading | stock market | stock trading | day trading | investing
Top
Also check
Penny Stock Trading
Day Trading
Technical Trading Strategy
401k Guide
401k Strategy
Begin to Learn how to Picks Breakout Stocks
We'll provide you exactly what breakout stocks to trade after doing deep technical
analysis and research, the exact price to buy them and the exact price to sell them…
We give you perfect stop loss point to avoid losses & to manage your risks so you
can realize maximum returns
we recommends technically up trend Breakout Stocks who are breakout with High Volume
considering that breakout stock you can plan your
stock market
Day Trading | Swing Trading | stock trading investing strategy.
For this breakout stock list check ►
► Breakout stocks for portfolio investing page: 1
► Breakout stocks for portfolio investing page: 2
► Breakout stocks for portfolio investing page: 3