The Bullish Base Breakout

Deixo-vos o ultimo setup para posições longas:

THE BULLISH BASE BREAKOUT
Market Type This setup is best used in:
• Bullish: weakly trending markets
• Bearish: strongly trending markets
• Bearish: weakly trending markets
• Range-bound markets

Key Indicators This setup relies on a price pattern (bullish
base) combined with two technical indicators: MACD
and on balance volume (OBV). Here are the specifics:
• First, the stock must be clearly seen to be in a
downtrend of some kind, strong or weak (see
definition).
Second, for at least the past 30 trading days (six
weeks), price must be moving within a
consolidation base of some kind. There are two
types of consolidation bases: triangles and
rectangles. These bases can occur in uptrends as
well as downtrends. In this setup, we want to see
these at the bottom of a downtrend.
• Once we have identified a consolidation base in a
downtrending stock, we need to confirm that it is
a bullish base. We do this by referring to two
technical indicators: MACD and OBV.
• MACD must be making a series of higher lows
while price is within the base may or may not be
making higher lows.
• OBV must rise above a trendline placed over
the tops of the indicator.
• Buy signal: A buy signal is triggered in a bullish
base at the first green or white candle (close
higher than the open) after the candlestick on
which the OBV trendline broke to the upside.
You can also enter on the day of an OBV break if
that candle is green or white.

The Screening Tool It is not possible to screen for
triangular or rectangular bases using what is commonly
available. Most of your trades in this setup will have to
come from your watch lists as you eyeball the charts. But
the following screen will turn up a few decent candidates
among many false hits that can be short-listed for further
research. Readers who are more adept at this sort of thing
than I am might want to fiddle around with these parameters
to make them more robust.
• For the last market close:
• U.S. stocks with . . .
• 20-day simple moving average of volume for today
is greater than 500,000.
• 60-day simple moving average of close for today
is greater than 10.
• 50-day simple moving average of close for today
is greater than 20-day simple moving average of
close for today.
• 50-day simple moving average of close for today
is less than 50-day simple moving average of
close for 40 days ago.
• Maximum range over 30 days starting today is
greater than maximum range over 15 days starting
today.
• Maximum range over 15 days starting today is
greater than maximum range over 5 days starting
today.
• Daily OBV for today is greater than daily OBV
for 40 days ago.
• Daily MACD line (12,26,9) for today is greater
than daily MACD line (12,26,9) for 40 days
ago.
• 50-day simple moving average of close for today
is less than 200-day simple moving average of
close for today.