Out of stock range

Out of stock rangeDespite the fact that the presence of a gap formed when stocks go out of the trading range is not a prerequisite for stocks to go outside their trading range, its presence confirms that a corresponding increase in pennies really represents a transition from trading within a certain range to an uptrend prices The volume of trading amounted to 3 million shares, i.е. almost twice the average daily volume. Pay attention to the implementation of the model of a single column of “bullish” orientation on the day when there was an exit of stocks outside its trading range.


As follows from this chart, over the next two days, the share price of DHI slightly decreased, approached the resistance zone, but then, during April and May, it confidently moved upwards. Although it is not presented at 9.11, the DH share price growth continued until the end of 2003, reaching almost $ 29 by the end of the year, which turned out to be very close to the historical maximum of these stocks.Note: all these prices were adjusted in accordance with the DHJ stock split that occurred on January 12, 2004; This adjustment is a common practice and is often performed automatically by the software used to create diagrams, or by the website whose services you use.


The exit of DHI3L shares of the trading range was an extremely favorable opportunity to carry out trading operations with the shares of this company. Stocks D.R. Horton are shares of a leading company representing one of the leading industries. These stocks have formed a solid base of the trading range and have gone beyond this trading range with a volume above average. Then the growth in the share price of the DHI continued until the end of 2003. Great! Your entry point for these trades could be either the time of the release of DH shares to the limits of the trading range, or the time of a two-day retracement. In Chapter 10, we will discuss ways to identify signs that the tendency is nearing completion and choosing the most appropriate moment to close out our trades in order to realize the profit.

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