Pre-Empting a Breakout
-> This is a a process which a lot of technical analyst tend to resist and avoid. The reason being the threat of a false breakout and a stoploss hit. Forgetting the fact that even on price confirmation its not necessary the stock will do things as we expect.
-> Got to accept that we cannot control stock movements or make a strong probability but the thing which can be controlled is risk-reward.
-> In pre-empting a breakout at times the risk-rewards are 1:5 and higher. Even if we dont get it right every time it works superbly.
-> How to pre-empt a breakout is a tough thing and a factor of luck with timing alongwith analysis. ( we discuss this in details in our training programs )
-> This is an example of a breakout which we pre-empted yesterday.
-> Breakout was above 250 but we jumped in a bit early. A nice flag/triangle of 20-30 points.
-> Recommended the same on CNBC BullsEye today. ( will be for a week for a small snippet at 11 am )
Some more pre-emptive breakouts which we have got into Gabriel India, Shriram Transport and watching out for Aditya birla nuvo above 1500. Not necessary they all would work but even if 1 does its fine as the risk-reward is superb.
For all the people in Bangalore do drop in to meet me in this Seminar.
INDIAN EQUITIES OUTLOOK & INTRODUCTION TO TECHNICAL ANALYSIS – BANGALORE SEMINAR ON 23RD AUGUST – 2014
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