Chartmill is a freely accessible charting software that allows to scan a database of stocks for specific patterns.
I often use them to search for ideas of stocks that are in a flat base, which means ready to either breakout or breakdown.
The Flat Base URL is below.
http://www.chartmill.com/stockscreen...cl=F&nw=on&v=9
Note that you need to register to see more than a few charts. Registration is free.
Also, many of these flat bases are due to stocks that have been bought out. These are easy to spot.
EA was in the flat base list of yesterday and is breaking out today.
The Effective Volume pattern looks positive, although yesterday was somewhat weak.
A breakout trade evaluation is one of most straightforward use of the Breakout Calculator.
The starting point is to find out the breakout price. In the case of EA, $58 is obvious, since it is above the base.
We then need to test two hypothesis: a simple breakout (BO) or a breakout on Volume (BOV).
We need to use at least 300 days for past trade analysis. 500 is even better.
The idea is to see how the stock reacted on past breakouts.
We can see below that standard Breakouts did pretty well.
However, we can see below that Breaouts on volume performed more than twice better than standard breakouts.
We have a Real-Time service that allows subscribers to see if the intraday expected volume is strong enough to be considered as strong volume by the end of the day.
In the case of EA, we can see today that the volume is both higher than past 10 days volume registered at that time, but also stronger than the theoretical volume pattern calculated using Mike's proprietary formula that can be found here:
http://www.effectivevolume.com/conte...tock-selection
Finally, the sensitivity analysis tells us that even breakouts above $58 will do well.
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