Why A Breakout Is Like A 'Get Out Of Jail' Card For Leading Stocks

Blockhead11-27

Are you a new investor who wants to make money in the top stocks and wonder why IBD uses the word "breakout" or the phrase "stock breakout" in many stories? You might think "breakout" sounds like ...

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You might think \"breakout\" sounds like ...</p>\n\n<a href=\"https://www.investors.com/how-to-invest/investors-corner/what-is-stock-breakout/\">Source Link</a>\n\n</div>\n","source":"investor_business_daily_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Why A Breakout Is Like A 'Get Out Of Jail' Card For Leading Stocks</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhy A Breakout Is Like A 'Get Out Of Jail' Card For Leading Stocks\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-27 21:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.investors.com/how-to-invest/investors-corner/what-is-stock-breakout/><strong>Blockhead</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Are you a new investor who wants to make money in the top stocks and wonder why IBD uses the word \"breakout\" or the phrase \"stock breakout\" in many stories? You might think \"breakout\" sounds like ...</p>\n\n<a href=\"https://www.investors.com/how-to-invest/investors-corner/what-is-stock-breakout/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TPX","symbol_name":"泰浦陛迪国际公司","start_time":0,"source_url":"https://www.investors.com/how-to-invest/investors-corner/what-is-stock-breakout/","article_id":"2486822438","we_media_id":null,"thumbnails":["https://www.investors.com/wp-content/uploads/2018/07/stock-bull-charge-01-adobe-150x150.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2486822438","pubTimestamp":1732712417,"columns":[],"sourceInfo":{"source_id":"investor_business_daily_highlight","name":"Investor’s Business Daily"},"weMediaInfo":null,"summary":"Resistance levels and support levels may imprison a stock for weeks or months. A stock breakout is often the start of a strong advance in price of a growth name.","collect":0,"end_time":0,"defaultTopTitle":"investors.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"TPX":"泰浦陛迪国际公司","BK4095":"家庭装饰品"},"translate_title":"为什么突破就像龙头股的“出狱”卡","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TPX":1},"content_text":"Are you a new investor who wants to make money in the top stocks and wonder why IBD uses the word \"breakout\" or the phrase \"stock breakout\" in many stories? You might think \"breakout\" sounds like something that belongs in a prison movie.\nIn a way, that's a useful analogy. Resistance levels and support levels may imprison a stock for weeks or even months. The consolidation lets the stock rise so far and then slaps it back down. The stock may sink so far and then climb back into the bigger part of the consolidation.\n\n\n\n↑\nX\n\n\n\n\nUsing Volatility Adjusted Momentum And Following Billion-Dollar Funds\n\n\nSee All Videos\n\n\n\n\nNOW PLAYING\nUsing Volatility Adjusted Momentum And Following Billion-Dollar Funds\n\n\n\n\nThen one day our imprisoned stock knifes upward, like a convict who plotted and delivered on a breakout.\nIf an investor grasps this simple concept, then buying a stock as it breaks out of a consolidation can lead to honest profits.\nGood Chart Patterns Precede Breakouts\nThe easiest way to see this on a chart is in a flat base. The flat base neither rises nor falls very much. This gives the stock a repetitive appearance until it finally breaks out. (In some cases, the stock will break downward, which is why the investor should never buy before the breakout.)\nIdeally, the investor wants to see strong volume on the breakout. Volume should be at least 40% greater than its average volume. In many cases, the volume increase will be far greater than that. The strong volume points to institutional participation. A stock doesn't get far if fund managers are not behind the breakout.\nLet's consider the strong move in 2019 by Tempur Sealy (TPX), for instance.\nOct. 17, 2019, was a big day for growth stock investors eyeing the giant in bedding innovation. The stock broke out of a well-formed flat base with a 81.85 buy point. Volume rushed much higher than normal — 71% above its 50-day moving average in turnover, to be precise.\nInitially, Tempur Sealy did not make significant price progress. But Halloween turned out to be scary good for holders. The stock screamed 11% higher in huge volume after posting a solid 27% rise in third-quarter earnings per share and a sixth consecutive quarter of accelerating sales growth. At the Oct. 31 session high of 92.33, Tempur Sealy stock showed a nearly 13% advance from the proper buy point.\nStrong price action should come along with the strong volume. A close above the consolidation's high is desirable. A close high in the day's price range also is desirable. A gap-up move is even better. (The gap up means the stock opens and holds above the previous day's entire price range.)\nIBD research has identified many other consolidations or bases that work well in strong uptrends. But for now, let's keep our understanding of a breakout simple.\nSix More Things About Good Stock Breakouts\nHere are six important things to remember about breakouts:\n\nA breakout occurs after a stock has stayed in a trading range for weeks, sometimes even months.\nThe breakout needs strong volume to be valid, typically more than 40% and often is more than double. In large caps, volume sometimes can be lower.\nPrice action should take the stock above the old trading range (except for those bases that carry a lower buy point).\nThe breakout should look clear and unarguable on a stock chart.\nThe breakout should come with the general market trending upward. A market tailwind can help a stock.\nThe stock, after a breakout, should not fall 7% or 8% below the proper buy point. If it does, that's called breaking expectations. It also would invoke the loss-cutting sell rule.\n\nThis article was originally published May 7, 2019, and has been updated. Please follow Chung on Twitter at @SaitoChung and @IBD_DChung for more on growth stocks, buy points, sell rules, breakouts, chart analysis and stock market insight. \nYOU MAY ALSO LIKE:\nPattern Recognition Helps Investors Spot Breakouts In This Premium IBD Service\nHow To Find The Correct Buy Point\nThe Easy Way To Check A Stock's Fund Support\nThe Best Large Cap Stocks: Inside IBD Big Cap 20\nHow To Quickly Spot The Flat Base, A Chart Pattern That Makes Money For Investors","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2486822438"}