I traded a classic setup today, the good old pullback to support after a breakout. The elements that lead to entry include:
1. Price breaks out over an established resistance level.
2. Volume picks up on the way up, showing increased accumulation.
3. The stock pulls back to the old resistance level on less volume than the breakout.
4. An NR7 (lowest range day within the past seven days) prints at resistance/support.
5. The stock opens the next day above the NR7 level on good volume. This signifies that the old resistance level has successfully turned into a support level.
My target for this trade is the old high at $33, though I may take partial profits earlier and move my stop up to the break even level.