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Sunday, December 14, 2008

Breakout follow Up

One thing I periodically think I should do and never get around to it is follow up on the breakouts I post during the week. When a large number of breakouts fail, it is usually a good indication of a weak market, and conversely, when a large number succeed, it can indicate a strong market. Hopefully I will be able to do a post every weekend following up on the week's breakouts.

QCOR is a definite failure. It got a nice high volume breakout, stalled, then collapsed on high volume, a very bad sign. It did get support at the 50dma, but betting it will bounce off it is very risky here.

RGLD head faked a breakout, then continued forming a handle. The relatively low volume on the false breakout was a good indication that it would not succeed.

ALGT was a breakout only in the sense of getting to new highs, but it did not break out from a proper base. Technically you can say the breakout failed, but this is following a strange pattern of 3 steps up, 2 steps back. Notice the relative strength line weakening.

Among the breakout failures: QCOR, SXCI, SHEN, HTS, OCN. RGLD and ALGT were not true breakouts. LZR, AIPC, CSKI, COGT, DCM have not failded, although COGT and DCM pulled back to just above the breakout point and are close to failure.

This is not a comprehensive list, just a quick follow up. This looks like another useful project.

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