NSE:ZUARI is breaking out in weekly with great volume buildup. With this breakout, its trying to come out from a nearly 4 year range. If this BO sustains, it could potentially be a rewarding one.
Breakouts from long-term ranges, especially accompanied by strong volume, can indeed be significant signals .
kolhatkarspms
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how can we confirm whether the breakout is not a fake one?
kolhatkarspms
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should we hold till cost of day and enter Tom after today high break
TradeCentral_IN
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@kolhatkarspms, There is no easy way to confirm if a breakout would turn out to be a fake one. We can look for obvious failure reasons like missing volume, no follow through etc but the best way to trade breakout is to manage your risk and have clear exit strategy in case the breakout fails. As an example, in this case, the low of the breakout candle could be your stop but it's a 20% candle so you need to ask yourself, would you be fine taking such kind of SL. If not, simply avoid.
Many of the breakouts are followed by retest of breakout zone so even if this (or any other) breakout works, it can always come back to retest before continuing moving up. If you want to play safe then you can wait for the retest to happen and entry when you see signs of reversal around breakout zone. There is a possibility that there won't be a retest and it may keep moving up. In that case, you would miss the trade but that's better than taking a 20% SL hit if it turns out to be a fake breakout or even does a retest.