Breakout Trading on Emerging and Strong Stocks

[almx]

Hi Everyone!
And welcome to this journal.

If you are interested in Stocks, Strong Stocks, Trending Stocks, trading base breakouts whether they are any consolidation figure or a Darvas Box, then I think that you will be interested in this thread.

My method.

1 - Every Month, Make a selection of the best performers stocks in the strongest industries. This will be my pool for picking my next trades.

2 - From that pool, select and track stocks that are consolidating and forming a base and then trade them on base breakout in the direction of the trend.

OK, now you wonder what is an Emerging and Strong or Trending Stock, so here is APP which has all that criteria at once.

The chart is self explanatory.

I trade solely the daily time frame and any trade duration is mid to long term as some stocks, as in the case above, can spend months in their bases before they take off.

Will post trades soon as they come.
Any question and/or sane and constructive criticism or ideas is welcomed!

 

[deaddog]

Can you discuss portfolio management?
Number of positions, max size of a position and risk management?

 

[almx]

Ideally I plan to have at least 10 positions weighted equally with a stop loss at 8%, so it's 0.8% at risk on every trade, it could be a bit less if the stock is too volatile or a bit more if I feel confident or that there are more setups available.

On the reward side I will take what the market gives the ideal being 3 to 5 times my risk.

This are the basics for now as I just started trading this technique at the same time I created this thread. Of course I could adapt it according to my progress and results.

 

[deaddog]

This are the basics for now as I just started trading this technique at the same time I created this thread. Of course I could adapt it according to my progress and results.

What have you been doing up until now?

 

[almx]

I have been trading Forex for a few years without success, and also some stocks before that but only for a few months. Recently I was attracted by the stocks again but this time I took the time to read about almost any famous legend out there, Livermore, Elder, O'Neil, among others and recently I read also Darvas, Minervini and Zanger, it's these three that made me switch definitely into stocks once and for all.

What about you ?

 

[deaddog]

Been swing trading stocks for over 20 years.
Read the same guys although you didn't mention 0'Niel.
Was a buy and hold investor until the tech wreck at the turn of the century.
My strategy is fairly simple; buy stocks that are going up and hold until the trend changes. Don't hold any losers in the portfolio.

 

[almx]

It's now time to post my trades...

Here are the stocks in my portfolio as of today, some I entered no later than today.
My entries aren't yet perfect, I'm working on it and as you will see, some entries are well before any breakout, this is because I'm trying techniques to anticipate them but in case of repeated failure I could quickly abandon this technique.

Here we go, from older to most recent.

1. HG
This one went IPO in late 2003, after and expanding wedge it shot up and made a (too) little symmetrical triangle but given the jump I decided to get in and it's working so far.

2. BROS
On this one I tried my first breakout anticipation. It came on a descending triangle which came itself after 2 extended bullish flags. My anticipation turned finally to be correct. The breakout came with good volume so I guess that at least the entry is good, let's see how it evolves.

3. FUTU
Here I traded the break of the white Darvas box that came after a new 52 week high shown by the sun. Well, right after that it seems it decided to consolidate a bit in a descending triangle, its base is somehow protecting my stop loss.

4. CMRE
This is a complete dumb entry I made, lol. At least I only entered half position, I think I though it was going into the sky and I wanted to be in.

5. APG
I went by the book on this one and waited for the breakout. Today it almost touched my stop loss but it looks now back on track above the falling wedge.

 

[almx]

Been swing trading stocks for over 20 years.
Read the same guys although you didn't mention 0'Niel.
Was a buy and hold investor until the tech wreck at the turn of the century.
My strategy is fairly simple; buy stocks that are going up and hold until the trend changes. Don't hold any losers in the portfolio.

Basically doing automatically the same, When things go wrong, the stop loss is usually taken very quickly, on the other hand, to get that 3x+ reward that I want, will certainly need months...

 

[almx]

6. CARG
This one has every technical stuff that I like in it, I really hope it will finish profitable.
After a 6 month cup finished with a fresh new 52 week high, it draw a handle during another 6 months by drawing a falling wedge which was broke up in a little Darvas box with again a new 52 week high which was finally also broken up and where I finally entered... a bit late but let's hope better than never...

7. UBER
Entered correctly on on the break of this falling wedge. The stock had a great year 2023 and seemed to replicate into 2024 and the falling wedge is very nice, The only thing I don't like is the missing volume, that's why I only entered half position.

8. VIRC
This one went so fast that the time to enter the order it had traveled 1 buck to the upside so I could enter only half of my position.
Another nice ascending triangle broken up to the upside with great volume.

9. PSN
Another anticipation test inside a falling wedge 2 1/2 months old. Given the nice run before it, this should continue or not ?

10. CLSK
It fills all the criteria and also entered in anticipation but with half position only as this one is more volatile.

11. VRNS
Same story and anticipation here but with a full position.

That's all I have for now...

 

[almx]

Just wanted to record what I consider a perfect Darvas Setup.

GM
Made a fresh 52 Week high (shown in the chart by the sun), followed by a first consolidation of 8% plus a second one of 4% which was finally broken yesterday with volume greater than average so all the technical stuff is there! Buy level was at 46.30

I missed this one, I think I can't have my eyes everywhere but will track it to see how it evolves...