Tuesday, April 29, 2014

Consolidation BreakOut Expert System - SGX

Consolidation Breakout strategy is use for Spotting big move after price move into consolidation.

For the setup to be effective, we need to see the price move from Big price change into narrow price price change. Setup only trigger if price break below the the prior day low(for short), break above prior day High(for long)

The breakout will determine the direction of the stock in the short term. E.g 1-2week.

Example: In the case study above, a trader can short the stock if price break below prior day low.

Stoploss can place at centre of the triangle $6.95 or above the Recent high. A reasonable Profit target for the short term timeframe will be around $6.73