My favorite setup for part-time trading is the breakout-pullback setup. It is the bread and butter setup for swing traders who can not follow every tick in the market. While it is a simple setup, there are a number of variations of the setup that need to be understood. The variation we are discussing today is what I call the “breakout-remount”.
Three steps are necessary for the breakout-remount:
1. A strong breakout clearing resistance with strong price and volume action.
2. A breakout failure, with price violating the bottom of the breakout bar, former resistance and a moving average (20, 50 or 200 day moving average)
3. A remount of the moving average on strong volume.
This setup often leads to powerful moves as the initial “weak” entrants are shaken out of the trade. In this two-minute video I go over the breakout-remount setup using the recent breakout-remount setup in $NFLX.
Now that you have watched the video, find some “breakout-remount” setups and post them in the comments below, and I will give you my feedback. New readers can review Part 1 of the series, the breakout-pullback setup.
My focus list is, market analysis and trade alerts are all featured in the Market Speculator Part-Time Swing Trade Report. If you would like to receive the swing trade report and alerts, sign up for the free trial. Follow me on twitter or email me at SinghJD1@aol.com