Continuation breakout thread

[Boggo]

Generally if they are not performing or if the market is flat I have no hesitation in going to cash.

Sometimes I do get a bit too trigger happy and bail out too soon, MNF being a recent example which has continued on without me but that if more of a psychological disappointment than a financial failure.
Having said that it only costs brokerage and a bit of slippage to get back in whereas hanging on when they are going nowhere will cost you especially if the funds can be used elsewhere ( I didn't get back into MNF).

 

[Nortorious]

New breakout opportunity presented today. ALU moved above the previous range where the high was $3.14. I got into the trade this morning with an at market purchase at $3.15.

Following the entry, the stock moved to a intraday high of $3.24 and closed at $3.17 showing a small profit for the first session of the holding.

Trading off the weekly chart but took the entry using the daily. Weekly chart below shows the overall activity and the stop will sit around $2.68 for now.

Weekly chart
View attachment 60312

Daily chart
View attachment 60313

Initial target is $4.00 from past action way back in 2001 and if it moves through this area, will be watching it again at $4.48ish.

We'll see what happens...

ALU heading the right way as expected, high for the week has been $3.31 and happy with the volume activity. Let's see where it ends the week.


VOC also doing well despite the overall market condition, showing good Relative Strength. Hitting new highs and expecting this to launch soon. Should be an interesting session tomorrow.

 

[tech/a]

3 weeks down the track.

I still maintain that volume plays a much
less part than the general public think. Indeed EXPECT.

Here I look at FPH which I bought up for discussion (There wasn't any!)
and VOC which Notorious bought up.





I cant see a difference in one over the other.

 

[Nortorious]

3 weeks down the track.

I still maintain that volume plays a much
less part than the general public think. Indeed EXPECT.

Here I look at FPH which I bought up for discussion (There wasn't any!)
and VOC which Notorious bought up.

View attachment 60403

View attachment 60404

I cant see a difference in one over the other.

Thanks for the post T/A. I think it is possibly a misunderstanding that's the issue here.

See the attached chart for reference. Whilst I agree this is tradeable see my thoughts for the three bars that are up for discussion....

Bar A = I consider this a false breakout as there was no volume behind it. I wouldn't trade this yet...

Bar B = Another false breakout due to the close, volume was a little better but I still wouldn't trade it...

Bar C = This would be the entry as it hits a new high and volume is massive relative to the past bars. This bar indicates it is heading higher....



The weekly chart is another story... I would trade the second last bar after it moved above previous high with petrol behind it...

 

[tech/a]

No no mis understanding

All valid comments and qualifications.
I don't disagree.
But to say that all breakouts on high volume will be
successful and all on low volume un successful I've found
To be incorrect.

As for breakouts on volume largely being more successful than those without.
I've not found conclusive evidence to support that either.

But you have an excellent rule set.
My only comment is to suggest you don't discard breakouts
On low volume--- particularly gaps and wide range breaks of resistance.

 

[Nortorious]

No no mis understanding

All valid comments and qualifications.
I don't disagree.
But to say that all breakouts on high volume will be
successful and all on low volume un successful I've found
To be incorrect.

As for breakouts on volume largely being more successful than those without.
I've not found conclusive evidence to support that either.

But you have an excellent rule set.
My only comment is to suggest you don't discard breakouts
On low volume--- particularly gaps and wide range breaks of resistance.

Ok thanks T/A.

I guess it comes down to expectations for me. Although the set up I look for and entry criteria is consistent, the outcomes are not. When I enter a trade there is no way of knowing if it will be a 20% profit or 200% profit trade. Despite set ups looking the same etc, every result will be different and I respect that. I'm trying to play it like a casino and trade the probabilities that will hopefully make me a winner long term.

Now as to trading gaps or wide range bars that burst through the ceiling, I haven't put much attention into this but always willing to expand my context. I'll keep on the lookout for some of this activity.

I appreciate your post as it starts me thinking in an area I may not have considered and having a narrow context can be limiting...

 

[tech/a]

Update

Cant understand why there is no interest in this thread.
6 weeks down the track.

Both very interesting charts.

Click to expand

 

[Craton]

Update

Cant understand why there is no interest in this thread.
6 weeks down the track.

FWIW, plenty of interest here.

 

[Nortorious]

Hey T/A, thanks for posting the charts and keeping the discussion alive.

I have been watching FPH and it's moving as expected given the breakout etc. As you say, ease of upward movement is good when compared to VOC.

VOC on the weekly still looks healthy to me. FPH as an entry candidate would be a better choice than VOC at the moment.

Let's keep watching and chatting to see what transpires...

 

[Nortorious]

Nice pick on FPH T/A.

I'm out or getting out of a lot of positions as I am not happy with the overall tone of the market. Moving out of positions with profit despite that starting to turn downwards. Still a couple that I'm in that are on the border of being sold...

Happy to preserve capital whilst I wait for a less riskier market to be in...

 

[Nortorious]

Lots and lots of stocks registering this type of pattern today!

I'm trying to get through my analysis quickly so that I can maximise the opportunity.

I was bearish on the overall market last week but my sentiment has changed after seeing how many stocks are poised to extend and extend further....

Interesting few weeks ahead!

Good first day off of work for three weeks with a market that is very fruitful at the moment.......

Will post some stocks on the move later today once my trading is done and I have some time to post up charts etc.

 

[Nortorious]

Lots and lots of stocks registering this type of pattern today!

I'm trying to get through my analysis quickly so that I can maximise the opportunity.

I was bearish on the overall market last week but my sentiment has changed after seeing how many stocks are poised to extend and extend further....

Interesting few weeks ahead!

Good first day off of work for three weeks with a market that is very fruitful at the moment.......

Will post some stocks on the move later today once my trading is done and I have some time to post up charts etc.

3 stocks entered today, CBA, GPT and TIX.

Lowest risk opportunities from the analysis that I have done thus far.

GPT and TIX both offer upcoming dividends which further reduce their risk.

CBA offered a position risk of 5.91%
GPT offered a position risk of 10.34% (taking into account dividend, adjusted risk = 7.93%)
TIX offered a position risk of 7.51% (taking into account dividend, adjusted risk = 5.51%)

The size of each position is adjusted to ensure that no single position exceeds a total capital/portfolio risk that is greater than 2%.

Let's see where these go....

Other opportunities analysed include:

ASX Code % risk
CMW 7.98%
SLF 8.21%
TLS 8.27%
GMG 9.34%
GHC 9.74%
BWP 11.07%
ANN 11.18%
SYD 11.50%
HSN 13.37%
AMC 14.72%
MFF 15.82%
RMD 16.37%
AIA 16.71%
CTX 17.87%

 

[Nortorious]

Happy new year to those following this thread. Doesn't seem to be much interest at all other than myself and tech/a trading posts. Would love to see some more get involved with their thoughts or identifying potential trades.

From the watchlist I had posted in my last post on 22 Dec 14, 10 stocks are up and 7 are down but all look fine if I was in them. I'm only in TIX, GPT (both which went ex-dividend on 29 Dec 14) and also CBA.

I spent some time developing my first watchlist for the year (have got back from some nice beach time) and came up with a list of 27 stocks that fit my criteria. Now I am not going to post all of these stocks as it is too many to track, my top 10 though from a risk point of view (risk being calculated as the difference from the last price to the 30 week weighted moving average ---> I do this as a preliminary risk rating but then if selected, a stop point is found using a different method):

Stock code and then risk below:
MGR 7.07%
DLX 7.60%
TLS 7.74%
FDC 8.50%
CMW 9.20%
SYD 10.51%
LLC 10.87%
CCP 10.93%
RHC 11.31%
ANN 12.96%

Now out of these, the best pick for my purposes is FDC. This is a true continuation breakout trade, with it being its highest high and everything still point upwards.

Interested to hear others thoughts on the stocks identified above and hopefully some debate as to what is a good breakout trade, where stops should go, calculating risk etc...

With my quarterly bonus from last year coming through this week, I should be able to boost my trading capital again and expand my activities further. Rinse and repeat and hopefully will have my money working, just as hard as I am, in no time!

2015 will be a big year!

 

[Nortorious]

Update

Cant understand why there is no interest in this thread.
6 weeks down the track.

Both very interesting charts.

Click to expand


View attachment 60614

View attachment 60615

Latest charts for FPH and VOC that we were tracking, both still look ok on the weekly. I got out of VOC and didn't stick to the plan of getting out with a trailing stop. Decided to liquidate as I was anticipating things rather than reading the play that was happening on this stock. Anyway, will continue to watch with interest...

 

[Nortorious]

3 stocks entered today, CBA, GPT and TIX.

Lowest risk opportunities from the analysis that I have done thus far.

GPT and TIX both offer upcoming dividends which further reduce their risk.

CBA offered a position risk of 5.91%
GPT offered a position risk of 10.34% (taking into account dividend, adjusted risk = 7.93%)
TIX offered a position risk of 7.51% (taking into account dividend, adjusted risk = 5.51%)

The size of each position is adjusted to ensure that no single position exceeds a total capital/portfolio risk that is greater than 2%.

Let's see where these go....

Other opportunities analysed include:

ASX Code % risk
CMW 7.98%
SLF 8.21%
TLS 8.27%
GMG 9.34%
GHC 9.74%
BWP 11.07%
ANN 11.18%
SYD 11.50%
HSN 13.37%
AMC 14.72%
MFF 15.82%
RMD 16.37%
AIA 16.71%
CTX 17.87%

Updating my post from just before Christmas to see how the various stocks I had done a risk/reward on for trading. Here's an update on there performance. The first three are positions I hold (but don't necessarily reflect my entry price or take into account any dividends paid):



Interesting to reflect on this and have confidence in my method for identifying potential trades using this strategy.

 

[Wysiwyg]

Interesting to reflect on this and have confidence in my method for identifying potential trades using this strategy.

Look good when the tide rises don't they?

 

[pavilion103]

Look good when the tide rises don't they?

Just got to put yourself in the position.

I've been out of stocks for 9 months. I see potential opportunity so I'm back in.

 

[Nortorious]

Look good when the tide rises don't they?

This is true. But it is even better when you have positioned yourself to take advantage of when the tide does rise...

I have been fully invested since late December and early Jan waiting for the latest action.

After updating my trailing stops, I only have a 6% at risk component left in the market for my entire portfolio... Meaning if everything was to drop overnight, the worst outcome would be minus 6% of my portfolio as it stands.

6% vs the probabilities of things continuing to head North, I like this bet.

 

[Wysiwyg]

This is true. But it is even better when you have positioned yourself to take advantage of when the tide does rise...

Now that is showing some real market know how.

 

[Nortorious]

Now that is showing some real market know how.

Maybe... but the tide can always turn quickly too.

Complacency is something that one needs to avoid in all areas of life.