| This thread has been created to share ideas about
stocks breaking out or about to break out from
significant bases, or literature which discusses
strategies for identifying and/or trading
breakouts.
Breakout trading allows one to make a good bit of
money in a hurry if you can catch the stock just
before or just after the breakout from a well-
established trading range, preferably a trading
range that has been formed for a long period of
time, such as months or even years.
On the other hand, nothing is more boring than
buying a stock in anticipation of a breakout and
watching it continue to base for months on end.
Thus, while identification of potential breakout
stocks which are still basing within a well-
established trading range is useful, it is
important to explain why you believe the stock
is about to breakout of the trading range so that
we can separate the wheat from the chaff.
Generally, a stock that is about to break out
will give some technical indication that it is
about to do so. For example, it may climb over
its 50-day moving average for the first time in
months or turn MAC positive (green) after being
MAC negative (red) for months. Someone, however,
may have a fundamental reason for expecting a
imminent breakout, such as an earnings report
about to be released or other fundamental news.
Here are some abbreviations which can be used
in this thread to shorten posts:
BO = stock which HAS broken out from well-
established trading range and looks like a
good candidate for further gains
JBO = stock which has JUST broken out from a
well-established trading range within the
last week or two
PBO = stock which is still within its trading
range but which you expect to break out of it
within the next two weeks because . . .
Ba = stock which is still basing within a well-established trading range and should be watched
TR = the trading range which forms the stock's
base from which a breakout will occur or has
occurred
TP = the time period in which the trading range
has formed
BP = breakout point
V = the volume of shares traded
Feel free to use other abbreviations if you wish but please provide a short description of the
abbreviation when you first use it if it is an
uncommon one.
Generally posts in which you identify BO, JBO, PBO
or Ba stocks should characterize them in one of
those categories, explain the technical or other
basis for any PBO designation, identify the
stock's trading range (TR), the time period over
which the base has formed (TP) and the break-out
point (BP). Information about the stock's volume
(V) at or before the BP also is useful, as stocks
which have extended runs and can be profitably bought after their breakout usually exhibit
relatively high volume either before, during or
just after their breakout point.
I will do a post on Concord Camera (LENS) which
has just broken out from a long base under 7
to give readers an idea of the type of post I
have in mind.
This is a MODERATED thread, which simply means
that I can exclude anyone I want from posting
here for any reason if I care to do so. Here are
some "tips" for staying in my "good graces".
You can call them "guidelines" if you want or
the Ten Commandments of the Breakout Thread though
I retain discretion to enforce them or not as
I see fit.
1. Expression of opinion, of course, is not only
allowed but encouraged. However, keep in mind
that information generally is more helpful than
opinion. If opinion is to be useful to others,
the fundamental, technical or other basis for
the opinion should be stated. Venting for the
sake of venting is discouraged.
2. You can disagree without being disagreeable.
Civility is expected. Personal attacks and bashing
are no-nos. You should be able to convey information and express your opinions without
using foul language or calling someone else a
moron.
3. This thread exists for identification of
stocks which are candidates for long positions,
not short positions. Shorts and stock bashers
are invited to express themselves and their
opinions on other SI threads.
4. Discussion should be limited to stocks which
are listed on the NYSE, AMEX or Nasdaq. This
thread is not intended for penny stocks, OTCBB
stocks or Canadian mining stocks, etc.
5. A sense of humor can turn a bad day into a
tolerable one.
6. Positive reinforcement, especially expressions
of appreciation for a profitable tip or insightful
post provided by another, is encouraged.
7. Lurkers are allowed but encouraged to say
hi and thanks for the info from time to time
if they find themselves becoming frequent
visitors.
8. All lurkers and readers are hereby warned that no one is entitled to rely on any of the
ideas, opinions or information provided herein
for the purpose of making investment decisions
or to blame any poster for an adverse outcome
resulting from any reliance placed on any of the
ideas, opinions or information provided herein.
Readers are expected to do their own due diligence
and independent research before taking any action
on the basis of what is said here, in whole or
in part.
9. The ideas, opinions and information supplied
herein are those of the posters and not of the
moderator. The moderator assumes no responsibility
for verifying the accuracy or validity of any of
the ideas, opinions and information provided
herein. However, posters are expected, at the
very least, to have a good faith basis for believing that any factual information posted
herein is accurate and that any opinion expressed
is, at the very least, honestly held.
10. What is said here should stay here, at
least for the time being. Please do not lift
matter posted here and place it on other sites
or threads. If you want to refer others to
a post on this thread, have them come visit
this site and read it.
Hope the above is not too forbidding! Lets share
some ideas, have some fun and make some money
together!
:)
CGW
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