Why some breakouts are real and powerful ? Why some breakouts fail and make new low? I always think about this question and want to have some clues. Here are some observations based on charts of CBOU (real breakout) and ETF (failed breakout).Some key conditions for a real breakout:
1. A failed 50/200 MA golden cross at the beginning of the pattern formation.
2. Before breakout, the price is already above the 200MA.
3. If breakout, the 50/200 MA golden cross can be formed.
4. Volume spiked at critical points, and showed the same pattern as the price pattern.
Nevertheless, Not every nice set up pattern can be 100% broken out, so cut loss as quick as possible, if breakout failed.
If CBOU can hold the golden crossing well, plus improved fundamental condition, it could become a long term bull. Just my opinion. For example, may be next SBUX. Watch and learn after the correction.
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