Breakout from Tightness
Note: The historical stock examples given below are for EDUCATIONAL USE ONLY. They ARE NOT to be used to make buy/sell decisions in today's market. For more information, please read the HSR Terms of Use.
Description
After a quiet period of at least 3 weeks of tight trading, price surges higher on expanding range AND heavy volume.
Behavior Note: Price may hold its 10 Week EMA upon a retracement after a breakout from tightness.
What you need to know
Tight trading areas within uptrends represent zones of accumulation (demand).
If price range and volume are expanding on a breakout, it implies that competition for a stock is increasing because buyers are no longer able to quietly accumulate stock.
This aggressiveness may help form the right-hand side of a stock's base.
Historical Stock Chart Examples 1A & 1B: Terra Nitrogen (TNH) 2004
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Click to enlarge 1A
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Click to enlarge 1B
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Please >>CLICK HERE<< to go to the next price behavior within Base Behaviors.
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