How I Look for Big Trend Turns

Below is a daily CYBR from its July top.

It is noteworthy that the top followed a false breakout and a Boomerang sell signal.

This is a flat phase or consolidation following a persistent advance.

When the breakout is short-lived and the stock knifes back below the breakout pivot, a Boomerang sell signal is triggered.

The larger the range of the reversal, the more it signals a Late Stage False Breakout (LSFBO).

On the heels of the LSFBO, CYBR had a Breakaway Gap to the downside = BELOW ITS 50 DAY Line.

This acted to validate the distribution at the highs.

In October, CYBR traced out 3 drives to a possible low when it issued a Boomerang in the opposite direction — a Boomerang buy signal.

CYBR undercut a wide and loose consolidation but knifed back to the topside.

Shortly after, it triggered a Rule of 4 Buy signal… a breakout over a 3 point trendline. This propelled a recapture of the 50 day line.

Noteworthy is the Breakaway Gap over the 50 day line — mirroring the Breakaway Gap on the way down.

There is an uncanny symmetry and proportionality in price action.

In our Hit & Run Report, we seek to capitalize on these patterns.

Noteworthy is that the first backtest of the RISING 50 day moving average in December elicited a runaway move.

Stocks walk before they run and run before they sprint.

The challenge is to determine, when they sprint, if it is indicative of further momentum or climactic.

One way to determine this is the Principle of Squares.

The October low was 94.30.

One full ‘square’ of 360 degrees up is 136.

CYBR is spiking into this ‘natural’ level which implies it will act as resistance.

Does that mean it is “a top?”

It means that it should respect 136 and react, and that this is a place to trim longs and gauge the behavior of any possible reaction.