Mosaic Traders Hub: Model Book Study

Identifying trend-ready stocks.

Hello Traders,

Early in my trading career, it was easy for me to figure out that trading breakouts aligned with my views.

It’s all about understanding the law of supply and demand for a stock. Chart setups help reveal if buyers or sellers are in charge.

A breakout candidate seeing strong demand should develop a basing structure with smaller pullbacks. Each reaction off a key resistance level shows sellers stepping in.

Smaller pullbacks demonstrate that buyers are scooping up shares ever more quickly. A breakout shows buying pressure overwhelming the sellers.

And a breakout to new all-time highs is like an airplane reaching cruising altitude in search of smooth skies.

A stock that rises to a level never seen before means there isn’t overhead supply from past movements to come on the market. That means a smaller chance of encountering turbulence on the journey.

The hard part is identifying stocks that could be trend ready on a breakout.

So today, I want to show you how I combine two common technical indicators to search for stocks that could be ready for a major trending period.