Reap Instant Profits By Buying Breaking Out Stocks
The S&P 500 Index (SPX) briefly manages to go above 2,600 before closing a point under that mark. The index finally broke out of its tight range to end the day up by 16.89 points. The bulls have taken the fight to the bears, and it appears that it’s only a matter of time before resistance at 2,600 is breached. As north appears to be the direction of the index, we look at names that are coming out of brief consolidation.
ADBE – Adobe Systems Inc
The stock has been on an unstoppable uptrend since 2002 when it posted a low of 8.24. It hasn’t looked back since. Daily and weekly charts show a large bullish continuation pattern that can take the name to new highs. Just like SPX, it appears that it’s only a matter of time before ADBE makes its next surge.
Technical indicators show that the stock is extremely overbought. However, names with incredible momentum often ignore such signals. In addition, the tightening daily range suggests that the stock is almost ready to explode. More importantly, volume is dwindling which indicates that the brief consolidation period is almost up.
Key resistance to break is 184 with volume above 10 million. The stock needs to attract momentum traders and speculators to build volume and push prices up. Breach of 184 with volume can take the stock to the target all-time high of 218.
The strategy is to wait for breakout to occur before placing buy orders. You have support at 179, 175, and 170 last.
Daily ADBE Chart
Weekly ADBE Chart
Summary of Strategy
Buy: breakout at 184 with 10 million volume
Support: 179, 175, and 170
Useless: Break support at 170 negates this trade call.
AMZN – Amazon Com Inc
Just like ADBE, AMZN appears ready to emerge from its brief consolidation. Daily and weekly charts show a large bullish continuation pattern that should take the stock to a new all-time high. Stocks like AMZN and ADBE support the view that SPX will breach 2,600 resistance soon.
Technical indicators show that the stock is overbought, but it has too much momentum to be stopped. Range has been narrowing as well and volume has been consistently low. Taking all these signs together, we have a stock that appears primed for ascent.
Key resistance to break is 1140 with volume of above seven million. Buy upon confirmation of volume. Without any known resistance up ahead, the stock has a clear path to the target of 1297.
You have support at 1120, 1108, and 1087.
Daily AMZN Chart
Weekly AMZN Chart
Summary of Strategy
Buy: breakout at 1140 with seven million volume
Support: 1120, 1108, 1087
Useless: Break support at 1087 invalidates this trade call.
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