Stock Trading

Why You Need To Learn About “The Sneakout”

Not all breakouts are earth shattering, life changing events. Some happen so quietly that you could easily miss them.

This is what I call “The Sneakout”.

I call it “The Sneakout” because it reminds me of a cat burglar sneaking out of a house with a sack full of loot. Before you know that anything has happened he’s far, far away selling your stuff on the black market.

Take a look at this PERFECT trend in $SBGL.

sbgl perfect trend

Amazing. $SBGL, like a lot of other gold stocks, has been on a tear lately and this awesome chart shows that perfectly. But take a look back to the beginning of the trend. It’s one of the first things I noticed about this chart.

The entry pattern.  A nice little “W” bottom and “The Sneakout”.  Here, let me zoom in to show you —

sbgl sneakout entry

See that? The breakout happens on a narrow range candle, up only 1.35% on the day — with almost NO VOLUME. The only hint you get that there is some volume there is the two huge green volume spikes in mid-December.

But that’s about it. There is nothing on this chart that screams that this stock is going to run up +84% in the next couple months.

That’s why I look at every single chart in the universe of stocks I trade, every weekend.

There are about 350 charts to rummage through and The Sneakout is one of those great setups that I’m always on the look-out for.

Until next time…

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