This Failed Breakout Is Exactly What I Want

"Everyone's bailing. I'm buying."

Nate Bear, Lead Technical Tactician, Monument Traders Alliance

I'm about to do something that'll probably sound insane...

I'm looking to buy a stock that just failed to break out.

Here's why...

I've been watching a particular pattern repeat over and over. You get a really nice chart that looks primed for a breakout. If it doesn't break out, it tends to get a false breakdown. Then... it does exactly what you thought it would do.

It's not obvious at first. But once you know what to look for, you'll start seeing it everywhere.

Let me show you what I mean with Lemonade (LMND)... before I tell you which ticker I'm watching now.

Last month, we were in Lemonade - my pick of the month for my Daily Profits Live subscribers.

This thing had squeezes on SIX time frames. There were squeezes everywhere. It was wild.

But it couldn't break out. And then what happened? We got a false breakdown instead of the breakout we expected.

And then BOOM - the stock did exactly what we thought it was going to do in the first place.

Now I'm seeing this exact pattern in Stride Inc. (LRN).

We've got a perfect chart - earnings winner, high short float, big gap overhead at $95.

Everything about this chart is textbook.

But on Monday, instead of breaking higher, we got a little breakdown right into support around $87.

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My AI scanning tool - S.A.M. - shows LRN has a volume buzz of negative 76%. What that means is LRN is pulling back on basically no volume. There's no conviction behind this move down.

This is crucial. Not all breakdowns are created equal.

When you see a breakdown on massive volume with conviction, that's different.

When you see a breakdown on anemic volume into obvious support? That's often a false breakdown.

So let's summarize what I'm looking for...

Follow These Five Steps

Here's how to spot these setups...

Start with the perfect chart: Look for multiple technical catalysts - squeezes, gaps, earnings momentum
Watch for the fake: When the expected breakout fails and turns into a breakdown, check the volume
Check where it lands: Is the breakdown stopping at logical support? That's your clue
Read the volume: Low-volume breakdowns often reverse. High-volume breakdowns often continue
Have your levels ready: Know exactly where you'll add, where you'll stop, and where you'll take profits.

Your Action Plan

Here's what I think happens with these perfect setups: everyone gets positioned the same way. When the obvious breakout doesn't happen immediately, weak hands bail and create the false breakdown.

But the original thesis hasn't changed - the fundamentals are still there, the technical setup is still there. You're just getting a better entry point because scared money is handing you their shares at support.

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This Failed Breakout Is Exactly What I Want

"Everyone's bailing. I'm buying."

Nate Bear, Lead Technical Tactician, Monument Traders Alliance

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