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by Jayanthi Gopalakrishnan
Catching a stock that is breaking out of its trading range during the early stage can result in a profitable trade.
Position: Buy
Jayanthi Gopalakrishnan
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BREAKOUTS
Breakouts
05/12/00 01:36:01 PMby Jayanthi Gopalakrishnan
Catching a stock that is breaking out of its trading range during the early stage can result in a profitable trade.
Position: Buy
| In the accompanying chart, Coca-Cola Co. (KO) showed evidence that it was breaking out of the trading range that it had been in since mid-March. The price gapped up at the open and closed at the high of its trading range. Note the increase in trading volume. There are occasions when such a scenario may prove to be a false breakout, and you can see that a similar breakout occurred on 4/4/00 but quickly retreated back into its trading range. |
| In order to determine if the activity on 5/9/00 is the beginning of a breakout, you'll have to watch the activity on the following day. On 5/10/00 prices did continue their upward movement and stayed above the trading range accompanied by higher-than-average volume. Additionally, the faster moving average had crossed above the slower moving average, another confirming signal. |
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| Graphic provided by: CQG Net. |
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Comments
Date: / /Rank: 4Comment: Chart resolution seems to be a problem. I have to sort of pretend to see the moving average lines.
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