How to Buy a Stock that is Breaking Out of a Base ?
- Rohit Musale, CFA
- 5 hours ago
- 2 min read
Not all breakouts fail.
And
Not all breakouts succeed.
What we, as professional swing & positional traders have to do is:
take the high probability ones
and ignore the low probability ones.
When a stock is in an uptrend,
it tends to form a base,
before breaking out of that base on high volume.
What to look for, when a stock is breaking out of the base:
Here are some pointers:
1) Check volume on the daily and the 15 minute chart
2) Do not buy low volume breakouts
3) Check pro-rata volume on the daily timeframe chart during market hours
4) Use 50 SMA on volume to identify high / low volume breakouts
5) Use 50 SMA on volume on both the daily and the 15 minute timeframe
6) Preferably the price must open below the buy point
7) Preferably the price must close the day above the buy point on high volume on the daily
8) If price opens above the buy point, do not buy OR take a small position size to control risk
9) Never buy outside the 1% buying range on the daily timeframe chart
10) Buy in parts. Do not buy in bulk. Example: to buy total 100 shares, buy 50, then 30, then 20. Keep an eye on price and volume. (I learnt this technique from Patrick Walker)
11) While buying in parts, if price and volume show adverse behavior, do not add more shares.
12) If price opens above the buying range and then falls back into the buying range, do not buy.
13) The goal to buy a rising stock, not a falling stock
14) For precise entries, buy the stock on the 15 minute chart on a close on high volume inside the buying range
15) To visually see the above process in action: study this video. I have published it today (30 March 2026). In this video, I have discussed the breakout of Granules stock on 24 March 2026
Have a fantastic day today.
Regards,
Rohit Musale, CFA
PS: To save tons of your learning time, enroll in my
PPS: Follow me on X: Rohit Musale, CFA