Tuesday, April 06, 2010


The better the base from which a stock breaks out the longer our holding time. However, ff a stock breaks out from extended level then we either go in for a day-trade pop or we look to short the failure, again for a quick daytrade.

Yesterday we had break-out triggers on AA AIG but we also had a list of short candidates on break-out failures:

AA was a traditional break-out alert at 14.8-14.85

AIG was good for a fast trade with our alert from last night at 35.6-35.7

We wrote that more experienced traders could look to short break-out failures on the following:

APC 75 reversed at the alert number

CNQ 80 reversed at the alert number

HAL 32 went through the alert near the open but reversed at R1

NEM 54 break-out failure

Why did we add a list of break-out failure candidates? Because most of the time if we can't find too many good break-out set-ups in our scans then the market often is in need of rest or will chop around.