Before entering a breakout, five data points should align. Here's a multi-tab checklist — using the Breadth, Leaders, and Charting tabs — that helps you separate high-probability setups from low-quality ones.
Most failed breakout trades have one thing in common: the trader checked the chart and ignored everything else. A quality breakout isn't just a stock clearing a resistance level — it's a stock clearing a resistance level in the right environment, from the right sector, with the right internal metrics confirming behind it. Here's the checklist that integrates all of that.
Tab: Breadth → Summary row
Before looking at any individual stock, check the market regime. Ask:
If the breadth environment fails — ratio below 1:1, VIX above 30, Market Tone Bear — this is not the time for new breakout entries regardless of how attractive the individual setup looks. The macro backdrop must be supportive first.
Tab: Leaders → Sector panel
Identify the stock's sector (Technology, Health Care, Financials, etc.) and check its RS Score on the Leaders tab. The stock's sector should have an RS Score above 50, ideally above 65. A breakout in a sector with an RS Score of 20 is swimming against the current — even if the individual setup is perfect, the group headwind reduces the probability of follow-through.
Also check the trend of the sector RS: is it rising (good) or declining (warning)?
Tab: Leaders → Stock list, or Gainers/Losers → Leadership Score column
Check the Leadership Score for your candidate. Target stocks with a score above 70 — ideally above 75. A high score means the stock has multiple confirming factors (trend, RS, momentum, volume) aligned, not just one. A low score on a stock clearing resistance usually means the move is news-driven, speculative, or isolated — without the institutional buying that sustains a breakout.
Tab: Charting → Select ticker
Open the chart and evaluate the setup quality:
Tab: Charting → Volume bars
Volume confirmation is the final and often most decisive check:
A breakout on below-average volume is the single clearest warning sign of a false start. Wait for the volume before committing size.
Sources & References
Track market breadth, sector rotation, and leadership scores across 12,000+ US stocks — start your 14-day free trial, full access from day one.
Try it free →Cancel anytime