Thursday, April 19, 2007

Breakout-Pullback Charts: BA and AMZN

BA and AMZN look to be setting up for breakout-pullback plays. Here is a quick summary of what I like to see on the breakout:
  1. Price breaks out over established resistance on above average volume

  2. Stock closes near the high of the day, printing a long range bar

  3. Evidence of accumulation prior to breakout

  4. RSI is at a higher level than when at previous high

  5. Stochastics printing higher lows previous to breakout

Both stocks fit the breakout critieria. All that is left is a low volume pullback to the breakout point. I'd like to enter Amazon around $44 and Boeing at $92.

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