click here to view full page
TRADING PRICE BREAKOUTS
Page 2
    In todays volatile markets being able to forsee future market or stock performance becomes increasingly difficult.  But there are some telltale signs that  can give a trader a hint as to where investment flows might be heading in the near future. One of these is the the box breakout trading system.
 
    Sometimes securities get caught in a price range from which they can't seem to escape . usually due to lack of interest from speculators who are busy chasing other more active securities. Then along comes an event that  brings fresh enthusiasim or pessimisim that forces  the price out of the previous  ' boxed ' range. The ensuing moves can be quite  spectacular and can be excellent medium term trading opportunities.

   The  breakout system works best if it occurs on the daily  charts so that is the time frame I will be  refering to in all the charts on this site, unless otherwise specified. This method is best suited for short/medium term trades , but not for intraday trades  or scalping. Lets take a look at some charts to get an idea of how a breakout develops and progresses. 
Page 3
Page 4
This chart shows , Yahoo inc.  The price slipped into a $7 range  that  lasted  2 years  from May 2001 to May 2003.
The breakout war relativly clean and straightforward and after it occured the stock never really looked  back and almost  tripled it's price over the  next 14 months.
This next chart for Symantec corporation shows a similair performance with the stock gainig 200%  in 14 months  However a closer look shows that breakouts are not always as clean and direct as we would like them to be. The price broke out of it's range in Dec 02  but fell slightly  back into the box  in April 03. It  struggled along  that important resistance until July 03 after which  things really took off.
Home
Next
Hosted by www.Geocities.ws

1