Swing traders are always on the lookout for momentum stocks that make explosive moves in a short period of time. The breakout breakaway gap setup is by far the best setup for swing traders looking for explosive price action. It is also great for part-time traders who don’t have time to day trade.
There are 4 elements to the breakout breakaway gap setup:
1) a breakout from a developed range
2) a big gap from that range
3) high volume relative to previous volume (at least 2-3 average volume)
4) the breakout is on tangible news such as earnings, rather than rumors and speculation.
In this video we go over $GOOGL to illustrate the power of the breakout breakaway gap setup.
Now that you have watched the video, find some breakout breakaway gap examples in momentum stocks that made explosive moves and share them in the comments below.
This is part 3 in the trading breakouts series “The only setup you need to know”.
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