Here’s one setup that’s a true trader’s favorite – a breakout above all-time high!
I’m not trying to be funny here – breakouts and uptrend continuations are in some shape or form loved and widely used by most traders I’ve met.
Our very own Ben Sturgill trades his own version of it quite a lot!
Just yesterday he posted three new major candidates for the setup in the Workshop – Ben’s live trading room.
Let me tell you what makes Ben’s version of the breakout trade so special and share the names he’s currently watching:
Break Out to New Highs
At its core, the setup is as old as the job of trading. It’s also fairly simple and this TSLA chart describes it best:
You can clearly see three consecutive breakouts above prior highs – each were followed by a solid new leg higher.
And that’s exactly what the setup tries to capture – in its simplest version, you look for tightening consolidations at the highs and patiently wait for a breakout in anticipation of the next leg.
Ben Sturgill, however, believes in trading it’s better to “over-do” than “under-do”, hence, he adds a few of his own bells and whistles, all to increase his probabilities and cut down his risks.
Apart from a simple chart pattern, for breakout higher trades, Ben also generally wants to see:
- A fundamentally strong and sound business
- A very strong long-term uptrend
- Relative Strength when compared to the sector/market.
- A long consolidation with downside rejections
And, as the saying goes, seek and you shall find. Here’re are 3 stocks Ben is eyeing right as we speak:
Datadog – DDOG
Following last week’s strength and the stock’s move back to the higher end of the consolidation, Ben thinks it might be time for the break higher.
He wants to see the name hold above $180 and then proceed back into the $200 area.
His stop for either stock or options entry is below $170.
Nvidia – NVDA
NVDA topped off a few beeks back and was seemingly ready to slide back, but the newly-found support makes one wonder if the next leg higher is in the making.
If the stock establishes above $300 and starts grinding back to the highs – I know Ben will likely be trading it.
The initial target on this one is $350. A strong rip higher may easily send up far above that.
Ben is being careful, though, and wants to see the name hold above $290 before he makes any moves.
Alphabet Inc – GOOGL
GOOGL has been making highs after highs for the better part of the past 18 months.
By the looks of it, it really doesn’t want to give the habit up anytime soon.
If the $2940 area holds up over the next few days, the stock has more or less only one way to go – back to $3000 and break higher after that.
Hence, $2940 will be key – a hold and move higher will likely trigger Ben to enter, while a move back below $2900 will put the trade on hold.