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2019issue C126-7

Forty-five-degree multi-week swing breakout as a closed procedure

This archive case treats a 45-degree multi-week advance after a tall, high-volume bar as one swing procedure: a next-session long a fixed increment above that high, an immediate protective stop, and a stand-aside when those marks are missing.

  • The case defines a swing-trading breakout as a multi-week advance that follows a 45-degree path after a large, high-volume strength bar.
  • The scan is aimed at choppy or consolidating conditions and prefers names with clearer directional movement than a broad equity index, seeking outlier entries rather than ordinary range trades.
  • In the illustrated example the long is specified for the session after the tall bar, 0.50 above the 46.50 high, which is 47, and only after price clears that high.
  • After a fill the swing plan places a 2-point stop immediately beneath the entry and, while the advance lacks material pullbacks, allows adding size in roughly two-point increments.
Entries in this reading3 entries

The case as one procedure

The archive case defines a swing-trading breakout as a multi-week advance that follows a 45-degree path after a large, high-volume bar. That path is the angled-breakout: a multi-week advance whose path tracks a roughly 45-degree rise after an initiating strength bar.

A strength-bar is a session whose body height and volume stand out on the chart and is treated as the launch of the breakout.

Where the scan looks

The scan is aimed at choppy or consolidating conditions and prefers names with clearer directional movement than a broad equity index. That preference is the relative-strength-filter: a scan constraint that prefers names moving more directionally than a broad index during consolidation.

In choppy tape the method seeks unusually strong outlier-type entries rather than ordinary range trades. That choice is the outlier-entry: a breakout chosen because it is unusually strong relative to a choppy broader tape.

The strength bar as a launch mark

Tall, high-volume bars are handled analogously to gaps as possible opening marks of a strong upside breakout.

The case chart treats a September 26 bar as the session with the largest body and volume and as the start of the angled breakout.

TSM 90-day daily closes around the 45-degree breakout

Taiwan Semiconductor ADR (TSM) daily closes from mid-July through mid-October 2019, read off the 90-day candle chart. A tall high-volume bar around 26 September (high $46.50) launches a 45-degree advance toward $50, with next-session long entry at $47.
Taiwan Semiconductor ADR (TSM) daily closes from mid-July through mid-October 2019, read off the 90-day candle chart. A tall high-volume bar around 26 September (high $46.50) launches a 45-degree advance toward $50, with next-session long entry at $47.TSM · daily · 2019-07-17T00:00:00.000Z to 2019-10-14T00:00:00.000Z

Closes digitized from the printed daily candle chart; wick extremes and volume are not reconstructed. September 26 high of $46.50 and $47 next-session entry are taken from the article text.

Next-session entry in the example

In the illustrated example, a long signal is recorded only after price clears the tall bar's session high of 46.50. The long is specified for the session after the tall bar, 0.50 above that high, which is 47 in the example.

That order is the next-session-entry: a long order placed on the day after the strength bar, a fixed increment above that bar's high.

Swing stop and add-on ladder

After a fill, the swing plan places a 2-point protective stop immediately beneath the entry. That is the swing-stop: a protective exit set a fixed distance under the fill as soon as the position is open.

Because the pattern is described as lacking material pullbacks, the same case allows adding size in roughly two-point increments. That plan is the add-on-ladder: a plan to increase size only while the advance continues without material pullbacks, using a fixed price increment.

When the marks are missing

An editorial reading is that the procedure stands aside when the strength bar, the next-session clearance, or the immediate stop cannot be marked. The archive case itself records a long only after price clears the tall bar's high and, in choppy tape, seeks outlier-type entries rather than ordinary range trades.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
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