Stock-Holmes

How to trade a breakout successfully?

Education
NSE:CENTURYTEX   CENTURY TEXT & IND
We shall see the chart of century text & ind in the 2-hour time frame.

The script had resistance at around 820 where a double top pattern had formed.
The third time when the share price approached this resistance trendline a strong green candle was formed breaking out of the resistance.
This green candle denotes a breakout. Risky traders usually enter a trade when this breakout occurs.

The breakout can be further confirmed by the resistance trendline switching its role into a support line now.
This is where most risk-averse traders take the trade.
After taking support at the same 820 level we can see the script rallying upwards.

The targets can be marked using the Fibonacci extension .
The stop loss for this trade should be below the trendline.

Happy trading!
Trade active: The first target was reached... We can see how beautifully the share price retested the resistance line and gave a rally today. Though it took 2 weeks, it is worth the wait. More rally to come.
Trade closed: target reached
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