Inside this article you will find the companies that a few minutes ago opened the current trading session showing a breakout chart pattern of a resistance or a trendline.
The other breakout articles published every day here on BullDude.com refer to the breakout chart pattern that occurs at the close of the trading session. Instead, this article shows this pattern if it already happens at the opening of the trading session.
The advantage of this second type is that it is possible to intercept a breakout as soon as it occurs having potentially a greater stock price increase margin, but the risk is that it is a false signal and that at the end of the trading session the breakout does not actually occur because the stock price fell compared to the breakout at the opening.
What is a breakout of a resistance and a trendline?
A resistance is an area where price growth has stopped once or several times, without ever being able to overcome it. We can define it as a real obstacle. So if the company is able to overcome (breakout) this obstacle, after being stopped previously, the chances of the price continuing to rise increase.
A trendline is a line that combines a series of minimum or maximum to identify the presence of a trend. The trendline indicates a positive trend if it combines a series of increasing minimums, while indicates a negative trend if it combines a series of decreasing maximums.
If the company is in a medium-long term positive trend (increasing lows for several weeks or months) and shows a short-term negative trend (decreasing highs for days or weeks), the trendline breakout of this negative short-term trend increases the probability that the company will start growing again to follow the positive medium-long term trend.
How do I know if it’s a false breakout?
The breakout is defined as “false” when the positive trend that supported the price growth reverses the direction (going from positive to negative). To understand when this event occurs, there is a red half-line in the chart that indicates the level below which the positive trend can be considered concluded.
A few negative days are not enough to call it a “false” breakout because often the cause is natural temporary volatility (given by the retest of the signal level or profit taking or general market crash).
The information in this article is for informational purposes only and does not constitute investment advice.
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