The Anatomy of a Stock Rally

Volatility is a trader's best friend because it represents a stock's price surges. As traders, we can make money off these aggressive movements no matter if the stock goes up or down, and there is a lot of opportunity right now for us to make volatile profits. For example, take a look at Newegg Commerce, Inc. (NASDAQ: NEGG). One quick glance at NEGG's chart shows that you could have predicted its explosive rally almost a month before it happened. With the Volatility Index ($VIX) nearly surpassing the 25 level yesterday, it's now more important than ever for you to know how to predict these price surges. That's why today, I'm going to break down the anatomy of a breakout stock. Each breakout has some signatures that are telling of upcoming activity. In the same way that your reflexes kick when the doctor hammers your knee... a stock will reflex aggressively when three specific things happen at the same time. Every single stock on the market, whether it's $20 or $2,000, behaves like this. Here's how to tell which stocks will break out...
Visit Money Morning Live