Breakout
In plain English. Breakout is the other way into a trend. It does not wait for a dip; it catches the session a stock leaves a tight consolidation or makes a new 52-week high. The move must come on clearly heavier volume than normal, inside a rising long-term trend.
Why it works. At a new high, every holder is in profit and no trapped buyers are waiting to sell. A tight base shows that sellers have dried up. Heavy volume shows that large investors are behind the move. Research on 52-week highs (George & Hwang, 2004) finds that stocks near their highs keep outperforming, because investors react too slowly to good news.
How to use it. Only fresh breakouts that are not yet extended are listed, so the entry stays close to the stop. A close back below the broken level means the breakout failed: exit.
Scanning for breakouts…