A breakout is when a stock pushes through a price it has failed to pass before, usually on heavy volume. Finding breakouts by hand means clicking through hundreds of charts. MetaStock’s Explorer does it in a minute. This guide shows how to set up a breakout scan, step by step.
What we are looking for
A simple, well-known breakout set-up:
- Today’s close is the highest close of the last 50 days.
- Today’s volume is at least 1.5 times the average of the last 20 days.
- The stock is above its 200-day moving average, so we are buying in an uptrend.
- Price is above $10, to avoid thin, jumpy stocks.
Our breakout trading guide shows what these look like on real charts.
Step 1: open the Explorer
In MetaStock, open the Power Console and choose Explorer, then New. Give the scan a name such as “50-day breakout”.
Step 2: write the filter
The Explorer has columns and a filter. Put the rules in the Filter tab:
C = HHV(C,50) AND V >= 1.5 * Ref(Mov(V,20,S),-1) AND C > Mov(C,200,S) AND C > 10
C is the close, V is volume, HHV(C,50) is the highest close of the last 50 days, Mov is a moving average and Ref(...,-1) means yesterday’s value, so today’s big volume does not inflate its own average.
Step 3: add columns so the results are useful
Columns show extra figures next to each stock that passes. Three worth adding:
- Column A:
V / Ref(Mov(V,20,S),-1), how many times normal volume. - Column B:
(C - Ref(C,-1)) / Ref(C,-1) * 100, today’s move in percent. - Column C:
C / Mov(C,200,S) * 100 - 100, how far above the 200-day average.
Step 4: choose the stocks and run it
Click Explore, pick the list to scan (the S&P 500, the Nasdaq 100, or all US stocks), and run. In a minute you get a list of every stock that broke out today, sorted however you like. Sort by column A to see the breakouts with the most conviction behind them.
Step 5: check the chart before you trade
A scan finds candidates, not trades. Open each chart and ask: did it break through a level that mattered, is the move on news that could reverse, and where would the stop go? If the answer to the last one is “a long way down”, let it go. Then record the trade in a journal and see how your breakouts do over 30 trades before sizing up.
Make it a habit
Save the scan and run it after the close each day. It takes a minute, and over a few weeks you will see which kinds of breakouts tend to follow through for you. If you want to test the whole rule set on past prices first, the System Tester guide shows how.
No MetaStock yet? The 30-day free trial includes the Explorer.
Affiliate note: ChartsView may earn a commission if you start a MetaStock trial through our link. It does not change the price you pay.