While this setup may be uncommon, the high probability of success (over 90 percent) makes it a must know for any trader. The signal parameters for this setup are as follows:
(1) Appearance of a large bodied Black Candle
The large body indicates an attempted breakout, while the black color indicates a closing price above the prior day's close
(2) Tightening trading range following the black candle
This indicates that the failed breakout was not followed by heavy selling but rather by slow accumulation
(3)Decreasing volume dropping to extremely low level .
This indicates lack of sellers and slow accumulation by buyers, a breakout is likely to follow as soon as buyers become even slightly more aggressive.
To trade this you can either buy the stock or use an option trade.
The example below SABR was an option trade recommended on the website on Sunday Evening to be executed on the next Trading
day Monday 3/28/2016 with the anticipated breakout occuring today.
