Learning to catch High Probability Breakouts

[Riskyman]

Amit,

Take a look at Adani Enterprises. After a year long consolidation the stock breaks out, pulls back to the TL on three occasions. You will notice that on all three occasions the stock manages to hold and close at or above the TL. With Adani an ideal place to buy would have been at the break of the breakout high i.e 520 levels ( You see that huge candle from 520-560)

Why would i not buy this at breakout?? Because there is no volume confirmation. I could buy it at the pull back but i dont want to knowing that the breakout didnt happen with huge volumes so this may have been a false breakout. So i wait for a second confirmation which comes in the form of a break of that breakout high at 520 coupled with huge volumes.

 

[Sunnyraj]

Amit,

Take a look at Adani Enterprises. After a year long consolidation the stock breaks out, pulls back to the TL on three occasions. You will notice that on all three occasions the stock manages to hold and close at or above the TL. With Adani an ideal place to buy would have been at the break of the breakout high i.e 520 levels ( You see that huge candle from 520-560)

Why would i not buy this at breakout?? Because there is no volume confirmation. I could buy it at the pull back but i dont want to knowing that the breakout didnt happen with huge volumes so this may have been a false breakout. So i wait for a second confirmation which comes in the form of a break of that breakout high at 520 coupled with huge volumes.

From this post i learnt that breakout has to be confirmed by Volumes.

If we notice the original chart which was discussed , we can compare the volumes on false breakout ( 27may-2june) and the breakout with huge volumes ( around 30 july).

Clearly the breakout with Good volumes will prove rewarding

 

[amitrandive]

Amit,

Take a look at Adani Enterprises. After a year long consolidation the stock breaks out, pulls back to the TL on three occasions. You will notice that on all three occasions the stock manages to hold and close at or above the TL. With Adani an ideal place to buy would have been at the break of the breakout high i.e 520 levels ( You see that huge candle from 520-560)

Why would i not buy this at breakout?? Because there is no volume confirmation. I could buy it at the pull back but i dont want to knowing that the breakout didnt happen with huge volumes so this may have been a false breakout. So i wait for a second confirmation which comes in the form of a break of that breakout high at 520 coupled with huge volumes.

Yes, great analysis of AdaniEnt.

I think you are referring to the circular portion that I have marked on the Monthly and Weekly Charts.

Monthly Chart of AdaniEnt

Weekly Chart of AdaniEnt

 

[amitrandive]

From this post i learnt that breakout has to be confirmed by Volumes.

If we notice the original chart which was discussed , we can compare the volumes on false breakout ( 27may-2june) and the breakout with huge volumes ( around 30 july).

Clearly the breakout with Good volumes will prove rewarding

Sunnyraj

For simple method of trading stocks , you need only two indicators.
Price and Volume.All other indicators are derivatives of price and volume

 

[Sunnyraj]

Came across this chart. Seniors plz take a look. What we have on the left is a valid breakout. It has good volumes, but is the breakout on the left a False breakout ?

though prices close down major support for a couple of days. We see a big candle with huge volumes.I remember this was the day when JK lakshmi closed 14% UP and now prices are again trading near supports.

 

[Sunnyraj]

Another way to look at it.

Not sure if i am right on this. Seniors pls comment

 

[kanakshah]

@amitrandive any way to contact you?

 

[anilnegi]

Sunnyraj

For simple method of trading stocks , you need only two indicators.
Price and Volume.All other indicators are derivatives of price and volume

Amit ji

you have mentioned volume and price along with their indication but did not mentioned what is % volume we should look for change i.e. 20%, 30% or 40% of previous day.

Anil negi

 

[Somatung]

Another way to look at it.

Not sure if i am right on this. Seniors pls comment

http://i58.tinypic.com/mh6hoh.png

 

[amitrandive]

http://i58.tinypic.com/mh6hoh.png

You can post the image location,in TJ so we don't have to go to tinypic site to see the picture.
Just post the link of the image in TJ,so the image appears here.

Just posting the above process for newbies who want to post images.