Sometimes it tests your patience to its limits that you are forced to give up and then just when you give up, stock rallies like crazy. Managing Breakout is one of the most difficult things to do and lots of time - you have to be lucky.
Let me share one Case Study: VST Ind
VST Industries broke out in July 2016 above 1990/2000 levels.
I covered this stock in June 2016 last year as stock to watch out for. The stock did breakout in July 2016 but then see what happpened: Nothing for six months. Just 10% move post breakout. And with demonetization and so much noise - definitely, this stock fell out of favor. But just watch what stock has done in first six months of 2017 - it's up another 70% - making a 80% breakout stock in a year. A pretty painful slow start and then total crazy move. This happens a lot with breakouts.
There is a very simple rule when it comes to breakout: Once a stock breaks out and it maintains it's trading level above the breakout line - then one should just hang on to make sure one can benefit from the subsequent rally which is always difficult to time.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers