$stp buy here at 15.25 Stop under 14 bucks (200dma)
Breakout pullbacks are one of my favorite plays. It is a staple for swingtrading and great for partime traders.
Couple components of it. Strong breakout breaking past a large layer of resistance. Volume has to be almost double what the daily avg is.
Look at the chart, we broke out over Multiple levels of resistance. Price and moving average! Now that resistance becomes support (see that works). So now below there are 2 levels of resistance Price + moving average. That makes support pretty strong.
When playing a breakout/pullback. You need a low volume dip. I prefer the volume to be almost 1/2 of what it was on the breakout. Then I want my pullback to be orderly. Which means no gap downs on the opens. We want a nice orderly low volume pullback.
Only then you can pull a trigger. Now a reasonable 1st target would around 17bucks and some change where the old high was before it started its descent pre-breakout.
Once a first target is reached we want to sell off a portion of it. Mostly like 1/2. Then we move our stop to the buypoint (15.25) This allows us to play on house money.
Real wealth can be made on that 2nd 1/2 pos. You need t hit a few big winners to really multiply your portfolio. So letting the last 1/2 pos run till you get stopped out is very key to longterm wealth. Yes sometimes you will be stopped out at the buypoint. But every blue moon you will get a stock that just runs and runs. Thats where you will see a huge impact in your yearly gains.
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This way of trading is great for partime traders. Since you just buy, set a stop, a target. Very mechanical
