Comments on: Breakout In the Biotechs Likely To Occur Soon https://rightsideofthechart.com/breakout-in-the-biotechs-likely-to-occur-soon/ Stock Trading, Investing & Market Analysis Mon, 23 Nov 2015 20:42:27 +0000 hourly 1 https://wordpress.org/?v=7.0.2 By: astoria26 https://rightsideofthechart.com/breakout-in-the-biotechs-likely-to-occur-soon/#comment-698 Mon, 23 Nov 2015 20:42:27 +0000 http://rightsideofthechart.com/?p=168985#comment-698 Gotcha, thanks!

]]> By: rsotc https://rightsideofthechart.com/breakout-in-the-biotechs-likely-to-occur-soon/#comment-697 Mon, 23 Nov 2015 20:36:50 +0000 http://rightsideofthechart.com/?p=168985#comment-697 astoria26- I was replying generically (to any breakout above a chart pattern) in response to your question “How do we tell if its a true breakout vs. just a head fake” although that reply would hold true to the symmetrical triangle patterns on the various biotech ETFs in place at this time.
By “…2) a close above the pattern based on the time frame of the chart that I’m tracking it on.”, I mean that if it happens to be a 120-minute chart, such as the case with these biotech etf patterns, then I like to see a 120-minute candlestick print a solid close above the pattern & to be more specific with the biotech example, I want to see not only one but a least 2 or 3 of the biotech sector ETFs breakout & print a closing candlestick above their respective patterns. Hope that helps but let me know if you have any other questions.

]]> By: astoria26 https://rightsideofthechart.com/breakout-in-the-biotechs-likely-to-occur-soon/#comment-696 Mon, 23 Nov 2015 19:24:07 +0000 http://rightsideofthechart.com/?p=168985#comment-696 When you say “2) a close above the pattern”, do you mean above the pattern of the downward trend from summer highs? This is great info, thanks for your thoughts!

]]> By: rsotc https://rightsideofthechart.com/breakout-in-the-biotechs-likely-to-occur-soon/#comment-695 Sat, 21 Nov 2015 17:26:40 +0000 http://rightsideofthechart.com/?p=168985#comment-695 @astoria26 – I missed this question earlier. Assuming the breakout is confirmed (more on that below) there’s really no way to know if a breakout is going to fail until after it does. In order to increase the odds that a breakout will stick, a couple of things that look for are 1) above average volume on the breakout (150%+ avg. vol.) and 2) a close above the pattern based on the time frame of the chart that I’m tracking it on. E.g.- This was a 2-hour (120-min) chart of IBB although in this case, we did get one 2-hour candlestick close above the pattern & the volume that day was 2.6mm vs a 90-day avg of 2.7mm (i.e.- below average, a non-confirmation of the breakout).

There’s really no way to identify with certainty which breakouts will fail & which breakouts, even if they are not confirmed by volume, will stick. The important thing is to realize that failed bullish breakouts (bull traps) are often followed by a sharp move lower & vice-versa with failed bearish breakdowns (bear traps), in which case you can either cut your losses, if you took it, or profit from a failed breakout by taking the other side of the trade once you see that it has failed (assuming that other technicals & variables confirm).

]]> By: astoria26 https://rightsideofthechart.com/breakout-in-the-biotechs-likely-to-occur-soon/#comment-684 Thu, 19 Nov 2015 20:49:28 +0000 http://rightsideofthechart.com/?p=168985#comment-684 Thanks for your analysis, Randy! Regarding the IBB false breakout, is there a strategy to not getting suckered into them? How do we tell if its a true breakthrough vs. just a head fake? I saw that yesterday and thought the biotechs were ready to rally, but that’s clearly not the case today.

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