Breakout Buying

[ramesh151]

This strategy is simple.
Buy a stock,as it crosses the major resistance line (breakout)when it is in uptrend duly confirmed,with rising volumes.

Again summary is
Buy stock in uptrend,confirm it by MA,buy if price crosses above resistance line.Buy only if volume rises considerably above normal volume.
breakout means price rising and going above the resistance line.
Danger precaution
Dont buy if price falls and volumes rise-you will end up loosing all your money.

1)Get a 3 month price chart.preferably candle chart,with 20ma and 50ma,and volume and moving average of volume.

2)Identify resistance and support levels.
3)Draw a resistance line where price hits repeatedly and cannot cross it.

4)when you see the trend is becoming uptrend(confirm by using 20MA and 50MA) WATCH VOLUMES.
5)when price increases and crosses the major resistance line with volume rise of 100% to 200% or even 300%, just buy.
6)keep a stoploss 2% below the current price.
7)keep a reasonable target to sell and take profits.
8)sell only half the shares you have at the targe price.
9)keep other half of shares to make money later on.
10)Sell when the price starts coming down by more than a small amount like 1%.
Preferably use a trailing stoploss to lock profits.
EXAMPLE WILL FOLLOW SOON.
see colgate
resistance is around 270 to 280.
see how many times price tried to reach and cross it but cant.
so aim at buying when price crosses the resistance level of 270 to 280, and only when volume rises over average red line of volume moving average.
see the first volume peak and buy along with it.

http://finance.yahoo.com/q/ta?s=COLG...20,m50&a=vm&c=



Ramesh151

[ramesh151]

please see

http://www.investorshub.com/boards/r...age_id=1744896