An educational #Thread on which stocks to buy on breakout retest which hv higher probabilities of success with a grt risk reward. Playing the breakout is easy in a bull market but in a volatile, consolidating market the retest becomes a preferred play.
"WHAT, WHEN" to buy ?
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"WHAT, WHEN" to buy ?
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So 1st lets understand WHAT to buy i.e which stocks to buy in breakout retest whose probability of success is high. Let's make a checklist & understand with practical e.g's.
1. Buy only those stocks on retest which is retesting breakout on all imp. time frames i.e D,W & M.
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1. Buy only those stocks on retest which is retesting breakout on all imp. time frames i.e D,W & M.
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A breakout on all time frames especially higher ones like W, M prove to be more successful with grt risk reward. For e.g - PSP Projects has broken out on all time frames after 4 yrs of consolidation & retesting it now.
The stock has bullish price action on all time frames.
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The stock has bullish price action on all time frames.
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2. The 2nd criteria is Volumes, RSI on breakout.
The vols. should be significantly high (Higher than the avg. volume of last 12 candles) preferably the highest in prev. 12 months.
The RSI on all TF's should be abv 55 during breakout & ideally shouldn't break it on retest.
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The vols. should be significantly high (Higher than the avg. volume of last 12 candles) preferably the highest in prev. 12 months.
The RSI on all TF's should be abv 55 during breakout & ideally shouldn't break it on retest.
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When to Buy??
1. Stock retests 21 DEMA with low volumes or makes a strong bullish reversal candle at the breakout level. Ideally both at same point would be the best case scenario.
The best part is r:r as seen below where low of breakout candle would be SL for swing trade.
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1. Stock retests 21 DEMA with low volumes or makes a strong bullish reversal candle at the breakout level. Ideally both at same point would be the best case scenario.
The best part is r:r as seen below where low of breakout candle would be SL for swing trade.
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2. Such strong Technical breakouts backed by breakout, consistency in earnings gives high conviction. Technicals backed by strong Fundamentals r always a deadly combination.
For e.g PSP posted highest EDITDA,Margins, PAT in last 15 quarters with consistent growth Qoq & Yoy.
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For e.g PSP posted highest EDITDA,Margins, PAT in last 15 quarters with consistent growth Qoq & Yoy.
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Buying strong Techno-Funda stocks at a reasonable #Price with favorable r:r is the perfect recipe for a high probability positional trade. As a exercise I would request every1 to post more e.g's of abv.
Do share this with like minded people. Suggestions, feedbacks are welcomed.
Do share this with like minded people. Suggestions, feedbacks are welcomed.
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