Breakouts and bases
Available on: Web · iOS · Android
On this page
A base is a stretch where a stock goes sideways on quiet trading. A breakout is the move that ends it. These recipes find stocks still inside a base, so you can watch them, and stocks that have just left one, so you can judge the move.
None of them tells you which way a base will resolve. They narrow the market to names worth a chart.
Recipes
Small-Cap Base Breakout
Super planSmall caps worth $300M to $2B that have chopped sideways (low trend efficiency) and now sit at least one ATR above their adaptive mean, with relative strength higher than 10 bars ago.
Filters
- Market capbetween$300M and $2B
- Regime extension≥10
- Regime extension greater than its value 10 bars ago
- Trend efficiency≤30
- Relative strength vs market greater than its value 10 bars ago
- How to use it
Open the chart and find the base: a flat range of several weeks. Then compare the volume on the move out of it with the volume inside it.
- Warning
Small caps trade thin. A move on two or three busy days can fall back into the range just as fast.
Realized Volatility Compression
Super planStocks trading over $50M a day whose realized volatility over the last two sessions sits more than one standard deviation below the market's.
Filters
- SMA(fw_parkinson_volatility_z_mkt,2)<-1
- SMA(bar_dollar_volume,50)>50M
- How to use it
Treat the list as a watchlist, not a signal. Save it as a scan and check which names start to widen their daily range.
- Warning
Compression says nothing about direction. A quiet stock can break down as easily as up.
Accumulation Launchpad
Super Pro planQuiet price and heavy volume near long-term support: price within 10% of a rising 200-day average, ATR under $1 and volume more than two standard deviations above its 60-day norm.
Filters
- ATR(h,l,c,14)<1
- SMA(c,200)>0
- Relative volume(v,60)>2
Open the scan to see its other filters.
- How to use it
Check whether the volume came in on up days or down days. Then look for an earnings date or news that explains it.
- Warning
The ATR test is in dollars, so it favors low-priced stocks. A $300 stock almost never has an ATR under $1.
EMA Launchpad
Super Pro planLarge, liquid stocks (over $500M a day) whose 21-, 50- and 65-day EMAs have squeezed together, while price holds above a rising 200-day average.
Filters
- Regime extensionbetween-8 and 8
- SMA(c,200)>0
- SMA(bar_dollar_volume,50)>500M
Open the scan to see its other filters.
- How to use it
Add the three EMAs to the chart. A flat, tight ribbon is the setup. The first close outside it is the move to watch.
- Warning
A ribbon can stay flat for weeks, and the squeeze resolves in either direction.
SMA Bullish Cross
Stocks whose 50-day moving average crossed above the 200-day in the last 5 bars, the "golden cross".
Filters
- SMA(c,50)crosses aboveSMA(c,200) (within 5 bars)
- How to use it
Check how far price has already run above both averages. A cross after a steep rally leaves less room than one after a slow base.
- Warning
Both averages lag. The cross confirms a turn that has already happened, so many traders use it as a filter, not an entry.
Bullish Marubozu
A full-body bullish candle in the last 3 bars, with no real wick at either end, on above-average volume in stocks trading over $5M a day.
Filters
- SMA(bar_dollar_volume,50)>5M
- Relative volume(v,60)>1 (within 3 bars)
- Daily bullish Marubozu candlestick pattern within the last 3 bars
- How to use it
Check where the candle sits. A marubozu that clears a range high reads differently from one in the middle of a range.
- Warning
It describes one session. Traders usually wait to see whether the next bars hold its range.
Quick reference
Tips
- Add Market cap≥2B to a breakout scan when you want fewer thin names.
- Run the same recipe with Time Machine on a past date, then check how the matches moved after it. Super and Super Pro only.
- Save a compression scan and run it daily. The names that drop off the list are the ones whose range has widened.