4/12/08            Study -  Breakouts Using Current HOTSTKS.exe Data
                               -----------------------   For TigerSoft Elite Subscribers -------------------------
                                      This is a supplement to my book Explosive Super Stocks book.

                                                     Horizontal Breakouts
                      Make Excellent Trades
                           by William Schmidt, Ph.D.
All Rights Reserved. (C) 2008 William Schmidt and Tiger Software

                                         Stocks exceeding flat and well-tested resistance often make quick spurts up as 
                             traders realize that there is not much stock readily available just above a price level that  
                             has persisted for some time.  The aggressive buying that allowed the breakout is apt to
                             continue and advance the stock sharply as others are attracted to the quick advance. 
                             Good news often comes out: better earnings, a broad industry-wide advance or even a
                             coming buy-out. 

                                         Why is flat resistance so important to spot?  Stock offered exactly at the
                             old highs usually represents less informed, simple and easy profit-taking at what
                             seems an advantageous price.  It is less likely to be smart and insider-informed selling.
                             I have said in my Explosive Super Stocks book that it often represents lazy
                             and inattentive  institutional selling.  Once prices breakout, those who sell may
                             have sellers' remorse and either buy back quickly or vow to buy again if the stock
                             falls back to the level they have sold.

                                       Aggressive traders can profit from these breakout moves time after time in
                             many different stocks.  To be successful, though, over the long run and when bear markets
                            occur, traders should use good money management principles, work with protective stops
                            and learn to read a chart to assess a stock's internal technical health to validate the breakout.
                            Using Peerless Stock Market Timing will make you aware when the overall market has
                            risks that should make you especially vigilant.  You will do best at this game when the number
                            of New Highs is expanding and over 100 on the NYSE.  That is the major reason for
                            my posting each day the number of 12-month NYSE new highs and lows.
                                         Placing automatic major Buy signal on your charts.  Look for major Tiger Buys:
                           B10, B12, B20 and B24. See the chart below.  Simultaneous major Buys are particularly
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          Rules for Spotting Reliable Breakouts
                 The Best Flat-topped Breakouts have

                     1) Nearly flat resistance lines drawn through intra-day highs. 
                     2) The line should go through at least 3 highs, each separated by a few trading
                          days or more, 3 weeks or more.
                     3) The Close on the breakout day must clearly be above the resistance line.
                          The resistance lines here are posted as Blue Lines.
                         (The most recent breakout looks quite false.  Note the negative Accumulation
                          Index readings on the breakout.)
wpe83C.jpg (60299 bytes)
                     4) The price bar turns red for the breakout day indicating unusual volume.
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                     5.) A price gap also authenticates the breakout.
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                     6) The Tiger Accumulation Index should be rising and above +.20.  Above +.50 is superb.
                                        Highs levels of Accumulation before or after the breakout are very bullish.
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                     7) The Black OBV Line should be making a new high that corresponds to price.
                     8) The Tiger ITRS (Relative Strength) should be above 0, show a rising trend or breaking
                          above a declining trend.
                     9.) Breakouts into all-time high territory are apt to advance most easily.
                   10.) Breakouts from trading ranges just below recent prices highs often set up an advance
                          past those highs. 

                       In addition, it helps if the stock has recently (in the last two weeks) tested
               unsuccessfully the resistance level.

                  You do not have to catch the stock exactly as it breakouts out or at the
                  close the day of the breakout.  The moves are often substantial.  Most
                  of the Bullish Special Situations are breakouts.  Few have all the desired
                  characteristics.   When a breakout fails it is often because the general
                  market has gotten very weak.  Short-term traders can place stops just below the
                  point of breakout.  Others should use the 21-day ma.  A close below that negates
                  the breakout.  Whip-saws can occur.  But they are part of the cost of doing
                  business.   And Selling on a failed breakout is the best way to preserve capital,
                  since some stocks make significant tops after making a false breakout.

                   Read my Explosive Super Stocks for more examples, theory and trading rules.

                   Run the nightly analysis and then look for new highs, stocks close to a near high,
                   B5s, B10s and B24s.  The thrice a week hotline offers Bullish Special Situations
                   that meet most of the conditions above and now offer impending breakouts to watch.
                   When to take profits?  Traders will often be glad to get 10%.  You can use
                   lots of other rules.  But as long as the stock is above a rising 50-day ma, it
                   will probably go higher, especially if there is an earlier Accumulation Index bulge
                   above +.40
                   Watch Out for FALSE BREAKOUTS:
( From - http://www.tigersoft.com/Tiger-Blogs/11-15-2007/index.html  )

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                                                    How To Predict and Spot Them.
                                               How To Profit from Them.

Traders will inevitably find themselves owning a stock that
                           makes a false breakout like the ones show below.  The hardest part
                           will not be in spotting the falseness of the breakout, but in getting
                           yourself to take a small loss.  This is essential money management.
                          Take the loss.  You can always buy the stock back if it makes
                          a subsequent high.  The danger of a 33% loss or more is quite high.
                         Savvy traders look for these patterns to short.  They know the
                         breakout has already forced the more nervous short sellers to
                         cover.    Without short sellers to cushion the decline, prices
                         can fall a long way.

                                   The point of breakout represents overcome resistance.  Former
                          resistance is normally excellent support.  When the expected support
                          fails and there is heavy red Distribution shown by the TigerSoft
                          Accumulation Index, watch out.  The stock will probably become
                          quite weak and should be shorted.  Note the heavy (red) down day
                          volume in the chart of GOT in July when the breakout has clearly

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                        The Close Must Be above Resistance on the Breakout

                              In July and again in November, the close on the breakout attempt was not above
                        the key flat resistance.  The stock quickly fell back.  In November, CBEY's breakout attempt
                       was accompanied by negative readings from the Tiger Accumulation Index and an ITRS
                      (Relative Strength) non-confirmation.  Look for these false moves.  They often set up big declines.

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                       False Breakouts above Flat Tops Are Obvious and Often Very Bearish.

    PAAS had already doubled in 7 months.  That made the March breakout fail.  20 is often
                 a significant psychological price barrier. 
The negative (red) Tiger Accumulation Index showed that
                 insiders were heavy sellers before, during and after the brief breakout in March.
The plunge
                 on heavy volume below the 50-day ma proved the stock was in trouble.  It subsequently lost
                 50% of its entire advance from 8 in July.  This chart shows that OBV did confirm the breakout.
                 It was the Tiger Accumulation Index which gave you the best clue that the breakout was false.

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  FLAT-Topped BREAKOUTS with Comments:    

         AKS - 2007-2008
             Often the horizontal breakouts are inverted head and shoulders patterns.
             Study the chart and earlier ones, if available, to see repeating patterns and how reliable breakouts are.

             Tiger Buy B5 signals do not necessarily appear on breakouts.  These patterns are hard to have computer identify.

AKS.BMP (1440054 bytes)

                       ANR - 2007-2008

                       See how this stock's prices run up to the resistance and fall back for a few days and then breakout.
                       Look for each stock's price mannerisms.

ANR.BMP (1440054 bytes)
                  APA - 2007-2008

                   The December breakout was false.  Its Accumulation Index readings were a little below +.20
                   on the breakout. 
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               AXYS - 2007-2008

               Flat-topped breakouts accompanied and preceded by bulging Accumulation are most reliable.
               Generally, high levels of Accumulation go a long way in precluding beg declines.

AXYS.BMP (1440054 bytes)
                 BDE - 2007-2008

                 This chart shows two false breakouts: August and November.   The Accumulation Index
                 readings were too low in both cases to make the breakouts trustworthy.

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            BBG - 2007-2008

                 This September breakout was confirmed by a recently strong Accumulation Index,
                 am OBV rising to new highs and an ITRS breakout.  The January breakout had only
                 good OBV.  But the minor breakout set up a second breakout. Watch for when one breakout
                 can lead to a second.  They offer excellent potential, too. 

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                BDX - 2007-2008

                 Big NYSE companies seldom make 10% advances in a week on breakouts.   The B5 breakout
                 failed in November.  It got caught up in a declining general market.  Its internals were not bad.
                 It just fell back into its base.  When the market climate grew more favorable, it rallied the next month.

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                  BTM - 2007-2008

                 The June breakout had good OBV and the Accum. Index had recently been +.25.
                 But look at the many non-confirmations marked with an "X" in November.

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                CBU - 2007-2008

                 Lots of marginal breakouts.  The Accumulation Index was too low to make
                 them safe.   The OBV Line had been higher in the beginning of 2007.

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                          CF - 2007-2008

                 Lots of "X" Non-Confirmations on the breakouts.   Traders should know these
                 were less reliable. 

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                CHK - 2007-2008

                 A good year for energy stocks.  The minor OBV NC on the September breakout might
                 have bee overlooked for that reason.  The February breakout has a low current Accum.
                 Index, but the breakout still worked because the group was hot.   The price patterns
                 here were tested 3 or 4 times and flat.  The second breakout occurred with red high
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                 CHT - 2007-2008

                 The September 2007 breakout was confirmed.  The gap low-volume breakout recently
                 did not.  The "X"s show the OBV, Accum. Index and ITRS non-confirmations.

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                    CLF - 2007-2008

                 The breakouts shown below were confirmed.  But the stock is a little slow moving.
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CTRP.BMP (1440054 bytes)
             CVA - 2007-2008
              Be sure to draw the lines through the intra-day highs.  The blue line below is not flat enough to
              safely qualify.  The preceding decline is too deep.

CVA.BMP (1440054 bytes)
                       CWEI - 2007-2008
                       When you see a bulge of Accumulation, watch for the next breakout.  It is apt to
                       work out well.   Thus, buying just over 36 in January worked out very well.
The earlier AI bulge nullifies a negative non-confirmation by the Accum. Index on
                       the March new highs.
  In a generally hot oil and gas move, these breakouts are
                       especially reliable.

CWEI.BMP (1440054 bytes)
                       CXG and DJIA - 2007-2008
                       Even when internal strength indicators satisfactorily confirm, there can still be
                       false breakouts.  It is best to trade with the market as judged by Peerless.  A new
                       Peerless will be released very soon.

                           ------------------------------------- DJIA ------------------------------------------------------------

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                     ------------------------------------------- CXG -------------------------------------------
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                   CPHD - 2007-2008

CPHD.BMP (1440054 bytes)
                      CPRT - 2007-2008

                       Red High volume breakouts with gaps more than makes up for a lagging OBV.

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   Study the following:   Comments will be added as time permits.

CRK.BMP (1920054 bytes)

CRT.BMP (1920054 bytes)

CSX.BMP (1920054 bytes)

DAR.BMP (1920054 bytes)

DBO.BMP (1920054 bytes)

DV.BMP (1440054 bytes)

EBIX.BMP (1440054 bytes)

ELMG.BMP (1920054 bytes)

ELN.BMP (1440054 bytes)

ENS.BMP (1440054 bytes)

ESLT.BMP (1440054 bytes)

EXPO.BMP (1440054 bytes)

FCN.BMP (1440054 bytes)

FDG.BMP (1440054 bytes)

FDP.BMP (1440054 bytes)

FLR.BMP (1440054 bytes)

FTI.BMP (1440054 bytes)

GEOI.BMP (1440054 bytes)

GG.BMP (1920054 bytes)

|GGB.BMP (1440054 bytes)

GLD.BMP (1440054 bytes)

GOLD.BMP (1440054 bytes)

GSG.BMP (1440054 bytes)

GVI.BMP (1440054 bytes)

HCH.BMP (1440054 bytes)

HLF.BMP (1440054 bytes)

ILMN.BMP (1440054 bytes)

ISRG.BMP (1440054 bytes)

ITE.BMP (1440054 bytes)

JST.BMP (1440054 bytes)

KEQU.BMP (1440054 bytes)

KNM.BMP (1920054 bytes)

KTII.BMP (1920054 bytes)

LIFC.BMP (1920054 bytes)

LNN.BMP (1440054 bytes)

LUK.BMP (1440054 bytes)
                        Heavy prior Accumulation makes up for negative Accumulation Index breakouts.
                        MCD was the highest AI/200 stock in the DJI-30 in early 2007.

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                                Look for repeating price patterns.
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wpe840.jpg (64122 bytes)

NCIT.BMP (1440054 bytes)

NEU.BMP (1920054 bytes)

OI.BMP (1920054 bytes)

OME.BMP (1920054 bytes)

PBT.BMP (1920054 bytes)

PHX.BMP (1920054 bytes)

PMFG.BMP (1920054 bytes)

POT.BMP (1920054 bytes)

POWL.BMP (1920054 bytes)

PRGO.BMP (1920054 bytes)

PSMT.BMP (1920054 bytes)

PTEC.BMP (1920054 bytes)

PZE.BMP (1920054 bytes)

QGEN.BMP (1920054 bytes)

RBA.BMP (1920054 bytes)

RICK.BMP (1920054 bytes)

RIG.BMP (1920054 bytes)

RIMM.BMP (1920054 bytes)

RRC.BMP (1920054 bytes)

RSTI.BMP (1920054 bytes)

SBR.BMP (1920054 bytes)

SDA.BMP (1920054 bytes)

SGMO.BMP (1920054 bytes)

SGY.BMP (1920054 bytes)

SID.BMP (1920054 bytes)

SOHU.BMP (1920054 bytes)

SPIR.BMP (1920054 bytes)

SPW.BMP (1920054 bytes)

SQM.BMP (1920054 bytes)

STRA.BMP (1920054 bytes)

SVT.BMP (1920054 bytes)

SWC.BMP (1920054 bytes)

SXE.BMP (1920054 bytes)

TAC.BMP (1920054 bytes)

TCN.BMP (1920054 bytes)

TECUA.BMP (1920054 bytes)

TELOZ.BMP (1920054 bytes)

TISI.BMP (1920054 bytes)

TKC.BMP (1920054 bytes)

TNS.BMP (1920054 bytes)

TTES.BMP (1920054 bytes)

VIP.BMP (1920054 bytes)

WFT.BMP (1920054 bytes)

WHG.BMP (1920054 bytes)

WLT.BMP (1920054 bytes)

WLT.BMP (1920054 bytes)

WWE.BMP (1920054 bytes)

X.BMP (1920054 bytes)