On 10/13/16, ULTA appeared on our Consolidation Breakout Long scanner. The stock had a significant selloff, a bounce followed by an 11 day consolidation as shown in the daily chart above. When a stock gaps open over the consolidation high as ULTA did, we need to wait for an intraday pattern to enter the trade.
The first 5 minute bar of ULTA formed a perfect flag pole on high volume. That by itself is meaningless. But when the second 5 minute bar closed as a small inside bar, aggressive traders could enter on a trade over the second 5 minute bar high. A higher probability trade would be a break over fifth 5 minute bar high. This entry confirms a higher probability bull flag breakout.
Our Consolidation Breakout Scanners are just two of our profitable scanners. This scanner doesn’t just look at the past two days of trading. It also looks at the past 30 days of trading for very specific patterns. If you would like to be alerted to trades like these, we offer a 7 day free trial.