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.