How To Scan For Volatility Contractions That Precede Breakouts (video)

A history of massive earnings growth, a valid base of consolidation, and a price at/near the 52-week high are three key elements of our momentum trading strategy for finding the best stock breakouts.

But once you have identified the top breakout candidates and created your watchlist, it is also helpful to know the timing of when a stock may actually be ready to smash through resistance and rally to new highs.

Although it is obviously impossible to know precisely when a strong stock will breakout, but most stocks undergo a multi-week volatility contraction (tightening of consolidation) immediately before they zoom higher and enter into a price expansion.

In this 5-minute video mini-lesson, we show you the exact scan criteria we use (with TC2000) to quickly and easily find hot stocks with valid basing patterns and volatility contractions that hint at an imminent rally.

As a bonus, we then run the scan and highlight the current chart patterns of six stocks setting up for breakout in the coming days: $BUFF, $CORT, $CSC, $EXAR, $WATT, and $XTLY.

While playing the video, you may jump directly to the 3-minute mark (3:00) to skip the mini-lesson on TC2000 scanning and just see the charts of six top stocks to add to your breakout watchlist now.

For best viewing quality, we suggest viewing the following video in full-screen mode by clicking in the box on bottom right corner of video player window:

If you like the way we screen for stocks, but want to avoid the hassle of manually setting up complex scanning software, the preset stock scans of Morpheus Stock Screener may be just what you’re looking for. It’s only 5 bucks for a trial subscription, so give it a try today.

To make stock picking even easier by seeing our exact buy trigger, stop, and target prices for the top stocks from our daily scans, the nightly Wagner Daily newsletter may be ideal for you (includes access to stock screener).

Questions or comments on this video mini-lesson? Just drop us a comment below and we’ll chat about it.