Tools To Keep You Out Of Trouble
Breakouts are great to
get on board, but remember price alone doesn’t necessarily signify a
stock’s true intentions. Especially
in choppy environments (not that we’ve seen much of that lately), most stocks
will be especially prone to fakeouts within the established range…and that
includes High RS stocks in strong patterns.
Volume is the technician’s second most
important tool in his or her arsenal, right behind price. Quite often though, it
is volume that ‘leads’ price, giving us valuable clues as to whether or not the
breakout will be strong enough to pursue in the first place.
11:35:46
Intraday
Setup Alert
From the Nightly
Daytraders Report Boston Scientific has formed an extended
intraday Slim
Jim. Entries above pattern resistance, and in the direction of a potential
daily chart Cup & Handle breakout are set at 64.51 (.06 above pattern).
Breakouts of the daily pattern are above handle highs of 64.82. Volume at this
time is running below average as BSX trades up .09 at 64.31.
In an otherwise tough environment, not only do I
insist on seeing fuel for the move, but I’ll also choose to loosen my entry above
prior highs. In this case, the alert required .06 thru prior levels, in order
for price to confirm a potential trade. But, if your own personal style can’t
wait for that much price confirmation, maybe you can wait for someone else to
show up ‘to the party’, in order to help you out. With volume trading well below average for that time of day as the stock triggered a price ‘breakout’ ever so
slightly, the power to back it up was conspicuously absent, giving me a reason
to not ‘break out’ the party horns just yet.