I waited quite a bit this AM to catch this trade and it paid out handsomely. Note on the Market Delta chart (click on chart for greater detail) that selling is terminating at higher price lows and that we get a pickup of volume at the offer prior to the breakout. Down on the bottom, X-axis, you can see how total volume expanded on the breakout, indicating institutional participation. The key, however, was seeing the prior trading range and the shift in distribution of volume as the range progressed. If you study many examples of such moves, you can become increasingly sensitive to them in real time.
Wednesday, June 27, 2007
Great Example of a Breakout Trade
I waited quite a bit this AM to catch this trade and it paid out handsomely. Note on the Market Delta chart (click on chart for greater detail) that selling is terminating at higher price lows and that we get a pickup of volume at the offer prior to the breakout. Down on the bottom, X-axis, you can see how total volume expanded on the breakout, indicating institutional participation. The key, however, was seeing the prior trading range and the shift in distribution of volume as the range progressed. If you study many examples of such moves, you can become increasingly sensitive to them in real time.
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