How to Nail a False Breakout

Are all breakouts are created equal? Nope.

The old saying is that Price Is Truth. Today, Jeff Cooper uses BUZN to show that price is often a liar.

It is structure, momentum and time that are truth.

On Monday and Tuesday, Hit & Run subscribers shorted BZUN right into the teeth of a breakout over a declining trendline as it recaptured its 50 day moving average.

Watch now to see why Jeff believed in that trade.

Here's the bottom line: all trading is contextual within the framework of patterns of distribution and accumulation. This is Jesse Livermore's Line of Least Resistance.

It is distribution and accumulation that show where the ‘bodies are buried’.

Fast moves come from false moves… And often it’s not an accident that stocks are broken out intentionally to trade shorts – with the shorts ending up getting squeezed.