F-Pattern Breakout - Pullback Entry at Prior Volume High

HTGM

This is an example of a breakout with volume more than double its previous high volume. The stock broke the 200SMA (orange line) and the previous high of $3.00 which failed last Nov. 8, 2017. The stock is due for a bounce since it had been consolidating for the last 2 months (10 weeks). After hitting that $3.00 mark it failed and dived to as low as 1.71 then resurfaced to $2.00 pulled back twice below $2.00 and went supernova up to $4.00. 

The question is. How to play this kind of move? What I usually do with this kind of move is to check the previous volume against the highest volume. I will trace the candle that belongs to that volume previous volume and find the neckline of that candle. In this case the neckline is $2.81. I will then use that $2.81 as a point of entry for my play. I will place a buy order at this line and once hit I will let it stay until the $4.00 mark is almost hit and sell the shares. In this case, from 1.81 to 4.00 you have a gain of $1.19. More or less $1.00 gain 10 to 11 days of trading. 

CNET

What is the difference with this kind of breakout from the previous one? Here, there is no way you can see the previous volume. This is too much Supernova, which is pretty hard to play, unless you short it instead. Advice: Do not play this kind of stock.

NOTE: All these stocks were captured in the stockfetcher filter I created called "200Percen Spike in Volume". The filter extracts the stocks that surge in volume of more than 200% against the average volume. And here the list last Jan 4, 2017 which I filtered to stocks that had changed 20% and above.

To avail the services of stockfetcher, you just need to get a monthly or quarterly subscriptions with them. I used the subscription via itunes with my ipad so I can use the stockfetcher app on my ipad as well. The code behind the filter is the following:

/* 200% Spike in Volume */

show stocks where volume is more than 200% above average volume(30) 1 day ago

and price between 1 and 10

and draw MA(10)        

and draw MA(20)                         

and draw MA(50)

and draw MA(200)

and price above MA(200)

and current volume > 200000

and Market is NASDAQ

I limit the filter to pick up only the NASDAQ stocks. I fyou want to include NYSE and other exchanges, just remove the line: "and Market is NASDAQ"

I prefer NASDAQ stocks because they are big movers in just a small span of time.

CCXI

Here's another F Pattern breakout with more than 200% surge of Volume. You can enter with a buy order in the same principle as with HTGM or you wait for candle formation with long tail and use the end of the tail as your buy order entry. Here, the buy order entry would be around $8.00 then sell it once the top wick of the candle whose volume had surge more than 200%. In this case, the sell price should be around 9.45 or take it at 9.25 to 9.35.

HOW DO I CHECK IF THESE STOCKS ARE GOOD PLAY?

I always counter check the list against finviz filter so that way I can gauge if the stocks are worthy of placing my money in. There are 4 filters I liked to incorporate in counter-checking the play:

1. EPS Growth quarter over quarter under Fundamental tab of finviz. This filter should be set to Positive (>0%).
2. Sales growth quarter over quarter under Fundamental tab of finviz. This filter should also be set to Positive (>0%).
3. Under Technical tab. Price should be above the 50 Day Simple moving Average.
4. Under the technical tab again, the Price should be above SMA200 or 200-Day Simple Moving Average.

To be able to avail this service with finviz, just sign up for free at https://finviz.com/