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2893 | Mar 20 | Mar 23Breakout example
Stock Consolidation and Breakout Examples
Consolidation Candles
Weeks or days, minimum 4-5 candles duration.
Consolidation Range: 5% - 10%
In a bull market, stocks often consolidate within a range of 5% to 10% before breaking out.
Minimum Breakout Percentage: 3%
A breakout is considered valid if the stock price moves at least 3% above the consolidation range.
Consolidation Candles
Weeks or days, minimum 4-5 candles duration.
Consolidation Range: 4% - 8%
In a bear market, stocks typically consolidate within a narrower range of 4% to 8% before breaking down.
Minimum Breakout Percentage: 2.5%
A breakout is considered valid if the stock price moves at least 2.5% below the consolidation range.
Frequently Asked Questions
Short introduction and basic concepts.
Consolidation occurs when a stock stays within a well-defined price corridor. We calculate the Consolidation Range using this formula:
Typically, a stock is "consolidating" if this value remains below 10% for at least 3–5 days/weeks. This indicates that the bulls and bears are in equilibrium.
A breakout happens when the price moves outside of this defined consolidation range with increased volume.
- Bullish Breakout: Price closes above the Highest High of the range.
- Bearish Breakout: Price closes below the Lowest Low of the range.
- Daily/Weekly Prices: Updated at the market close of each respective period.
- F-Score & Fundamentals: Refreshed monthly or upon new quarterly filing releases.
