Pops by David Steckler
You can identify breakouts using stochastic pops. What are they, anyway?
Many equity traders
strive to identify stocks
that are ready to break
out and begin a sustained price move up.
The difficulty lies in
identifying which stocks are getting ready
to break out and determining when the
breakout will occur.
One technique I like to use to identify
breakouts is the stochastic pop. The "pop"
comes about when the stochastic indicator
goes above the 70 to 80 level. Instead of
reversing, however, the stock keeps going
and momentum continues to rise. "Stochastic pop" is actually a misnomer, since
the pop is in the price, not the stochastic.
The stochastic itself stays above 70 or 80,
held there by the price moving up and
staying high in its daily ranges.
I identify a stochastic pop setup when the
following conditions occur: