ChrisMoody

Flat Base Breakout Trade Setup - Educational

AMEX:UNG   UNITED STATES NATURAL GAS FUND
559 4 5
Full Credit goes to Jake Bernstein. Jake is a Legendary Futures Trader who has done extensive historical back-testing. He's a best-selling author and Jake has published many of his best trade setups.

One of Jakes' most profitable setups is what he refers to as a "Flat Based Breakout".

Setup Specifics:
1. Typically find on a Daily or Weekly Chart.
2. Ideally You want to see a significant fall in price of the security your looking at.
3. The Longer price stays in the consolidation phase the better. This creates more buyers and sellers and/or shares traded in this area so when "The Break" occurs the traders who were "Short" have to cover creating a quick and significant move.

This is a Daily Chart of UNG             (Note: Better Examples Below) which as you can see has fallen from 87.50 in 2010 to a Low of 14.25 in 2012. UNG             has been in a Trading Range from 24.60 to roughly 16.60 for over a year now. This has created a lot of "Energy" that could create a significant move when the High of 24.09 is taken out.

On this chart I placed 3 Fib Retracements at major Swing Highs to the low of 14.25 (You can tell where I drew the Fibs from the top of the White Dashed Lines.

For Fib Values I use
0
.383
.50
.618
.786
1.0
1.272 (Extension)
1.618 (Extension)

To clean up the chart I took off all the lines that weren't in a "Confluence Area" of multiple Fib Levels. I find these "Confluence" areas are great Price Attractors. When price breaks above 24.09 the first 3 targets are shown by the White Ovals on the chart. Rough prices are Target 1 = 36.00, Target 2 = 42.50, Target 3 = 50.00 area.

I ran across this chart and wanted to Share the Setup so you can keep a lookout for it. After taking a look at a few charts others have shared on TradingView I quickly found several that I thought were better examples than UNG             , However, this specific Trade Setup wasn't referenced.

Timwest Posted a Great chart of TSLA             .
Look at the bottom left of the chart. Notice Consolidation area, then a Gap above, Test, then she stock took off.
Tesla (TSLA) oversold and turning up


JR Posted a Great example of symbol NBG            
Notice the price action when you press the "Play" icon to fill in the last 2 months.
Get Your Lottery Tickets Ready For A Powerball Winner


Can anyone find any current examples?
Gino
3 years ago
Chris, thank you very much for your time and effort. Do you have any prospect about what the next year holds fort Gold?
Reply
ChrisMoody PRO Gino
3 years ago
Gino...Sorry for the delay...I'll post a response for you soon...
Reply
Gino ChrisMoody
3 years ago
No problem my man, it's your time we are taking away from you, so thanks a million.
Check out this guy on Dailyfx, I get so jealous sometimes of his results which he posted,
He made most of his money from gold against dollar.

http://www.dailyfx.com/forex_forum/gbp-jpy-pairs/13856-gbp-jpy-pairs-h1-2013-a-6166.html
Reply
ChrisMoody PRO Gino
3 years ago
Gino...Sorry for the delay I've been slammed lately. I have an Active Trader account with FXCM so I have access to all of their stuff. If you have access to DailyFX Plus the only thing I find useful is their "Speculative Sentiment Index". If you don't let me know and I will send you a screenshot so you can see what it shows. Check out this video. I've watched this guys videos for years and has good ability to see the Big Picture. Don't get caught up in his indicators though...I'll get you my analysis soon..

http://www.compassfx.com/video/ip/11414/11414.html?inf_contact_key=43fcaf16f2587519705838be81a6298948a2591b0359efabe1a69374db088fd2
Reply
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