Important Stocks To Watch - Breakout Stocks

Long Term Breakouts To Watch

Stocks At 50 MA & 200 MA

Break Downtrendline At 20 MA Trading Strategy

This trading strategy takes advantage of an orderly correction to the rising 20 day moving average. The keyword here is "orderly" correction. If the correction was messy then it cannot be a setup.

With an orderly correction, you can easily draw a downtrend line to connect the highs of the correction.

Criteria And Trade Management

In order to find a setup we need to find a stock that is in an uptrend.

  1. Stock should be making higher highs and higher lows in an uptrend
  2. The stock should correct orderly to the rising 20 MA
  3. Draw a downtrend line to connect the highs of the correction
  4. Buy the stock when it trades above the downtrend line
  5. Put a stop loss below the entire correction
  6. Raise the stop loss to breakeven when you have a 1:1 risk: reward profit
  7. Sell 1/2 or 1/3 when you have a 1:1 risk reward profit
  8. Ride the other 1/2 or 1/3 to higher profits

In the chart above we can see how KEYS was in an uptrend. The stock corrected orderly to the rising 20 MA and then it broke out higher. A trader could buy the breakout above the downtrend line and put a stop loss below the low of the correction.

If you go down to the 60 min chart, you can usually draw a better down trend line.

The 60 min chart will help you to spot the break of the downtrend line better.

It takes some practice to draw a correct trend line. But with time, you can draw a nice one.

  • Help support this page and press the Facebook Like button below. Thanks!

Join Dstockmarket's Facebook Page 

Recent Articles

  1. Stocks To Watch - Breakout Stocks

    Dec 03, 21 09:52 AM

    Here are a list of stocks that have broke out or about to break out. Breakout stocks can often give us a good reward to risk ratio.

    Read More

  2. Stocks At Their 50 MA And 200 MA

    Dec 03, 21 07:22 AM

    Here are a list of stocks that are at their 50 MA and 200 MA. The 50 day moving average and 200 day moving average can be a support area where stocks bounce off

    Read More

  3. US Stock Market Analysis Dec 2021 | Dstockmarket

    Dec 03, 21 05:59 AM

    How will the US stock market work in December? Will there be a rebound? Will the stock market continue to go higher?

    Read More

  4. Technical Analysis Of AAPL : Making Sense Of Apple's Stock Price

    Dec 01, 21 09:24 AM

    Apple is one of those stocks that we should look at almost every day. The reasons is because it is a component of the Dow Jones, the S&P 500 and the Nasdaq.

    Read More

  5. US Stock Market Analysis November 2021

    Nov 30, 21 09:11 AM

    Are the markets going to continue to move higher? Is it in an uptrend or downtrend and where are the support and resistance?

    Read More

New! Comments

Have your say about what you just read! Leave me a comment in the box below.