{"id":4983,"date":"2017-04-20T08:19:35","date_gmt":"2017-04-20T12:19:35","guid":{"rendered":"http:\/\/www.morpheustrading.com\/blog\/?p=4983"},"modified":"2017-05-01T16:16:23","modified_gmt":"2017-05-01T20:16:23","slug":"breakout-stock-newr","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/breakout-stock-newr\/","title":{"rendered":"Breakout Alert: Why New Relic Is Poised To Explode Higher [$NEWR]"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">TABLE OF CONTENTS<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/morpheustrading.com\/blog\/breakout-stock-newr\/#San_Francisco-based_software_analytics_firm_New_Relic_NEWR_is_a_relatively_new_IPO_from_late_2014_with_explosive_potential_Continue_reading_to_see_why_this_stock_is_so_hot\" >San Francisco-based software analytics firm New Relic ($NEWR) is a relatively new IPO from late 2014 with\u00a0explosive potential. Continue reading to see why this stock is so hot.<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/morpheustrading.com\/blog\/breakout-stock-newr\/#The_Big_Picture\" >The Big Picture<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/morpheustrading.com\/blog\/breakout-stock-newr\/#Three_Bases\" >Three Bases<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/morpheustrading.com\/blog\/breakout-stock-newr\/#Off_To_The_Races\" >Off To The Races<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"San_Francisco-based_software_analytics_firm_New_Relic_NEWR_is_a_relatively_new_IPO_from_late_2014_with_explosive_potential_Continue_reading_to_see_why_this_stock_is_so_hot\"><\/span><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-4988\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2017\/04\/new-relic-logo.png\" alt=\"new-relic-logo\" width=\"250\" height=\"202\" title=\"\"><br \/>\nSan Francisco-based software analytics firm New Relic ($NEWR) is a relatively new IPO from late 2014 with\u00a0explosive potential. Continue reading to see why this stock is so hot.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>With $NEWR forming a tight-base near the highs its two-year trading range, let&#8217;s walk through the charts of multiple timeframes to analyze the breakout setup.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_Big_Picture\"><\/span><strong>The Big Picture<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Many traders place too much emphasis on the daily chart timeframe, with very few looking at monthly, or even weekly charts.<\/p>\n<p>But this is a mistake because longer-term charts provide so much &#8220;big picture&#8221; insight.<\/p>\n<p>The monthly chart of $NEWR really shows just how tight the price action has been as of late, with two months in a row of tight ranged trading prior to this month&#8217;s breakout.<\/p>\n<p>Last month&#8217;s action produced an inside candle as well.<\/p>\n<p>Whether a daily, weekly, or monthly chart, an inside candle shows price contracting, which leads to price expanding (although not always in the desired direction):<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/\/%7Erick\/\/charts\/2016\/170420NEWR2.png\" alt=\"$NEWR MONTHLY\" title=\"\"><\/p>\n<p>Now that we have a stock that is trading near the highs of a two-year range, let&#8217;s take a look at the weekly chart to see if we can identify any valid basing patterns.<\/p>\n<p>If there isn&#8217;t a valid base in play, then we are forced to sit on the sidelines and wait for one to develop.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Three_Bases\"><\/span><strong>Three Bases<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Looking at the weekly chart below, we see three bases that have formed since late 2015.<\/p>\n<p>The first base at point A was a bit too wide in pulling back nearly 50% off the high.<\/p>\n<p>The second base at B was much more healthy correction off 25% off the high, but note how the right side of the pattern ran from the lows of the base to the highs in just a few weeks.<\/p>\n<p>That sort of rapid run up is not ideal. Note that the price stalled at the prior high before reversing lower.<\/p>\n<p>The current base at C has the most potential, only pulling back less than 20% off the highs while holding above the rising 10 and <span class=\"__postbox-detected-content __postbox-detected-date\">40-week<\/span> moving averages.<\/p>\n<p>Note the tight closes from week to week before breaking above $37.50, which is a sign of accumulation:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/\/%7Erick\/\/charts\/2016\/170420NEWR3.png\" alt=\"$NEWR\" title=\"\"><\/p>\n<p>With a tight weekly base in play and a monthly that is potentially ready to set a new all-time high, $NEWR is an ideal buy candidate, so let&#8217;s find an entry.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Off_To_The_Races\"><\/span><strong>Off To The Races<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In early <span class=\"__postbox-detected-content __postbox-detected-date\">April,<\/span> we were monitoring $NEWR for a potential breakout entry around $37.50.<\/p>\n<p>That breakout did <span class=\"__postbox-detected-content __postbox-detected-date\">arrive on April 5<\/span> in the form of a 3% opening gap up that closed with a 5% gain.<\/p>\n<p>Volume confirmed the price action as it was 260% greater than average (bullish day to say the least).<\/p>\n<p>After stalling at $40, $NEWR began to pull back in, closing in on the <span class=\"__postbox-detected-content __postbox-detected-date\">10-day<\/span> MA.<\/p>\n<p>However, since the breakout was so strong, we decided to place a buy limit order above the rising <span class=\"__postbox-detected-content __postbox-detected-date\">10-day<\/span> <span class=\"__postbox-detected-content __postbox-detected-date\">MA on April 11,<\/span> which triggered at $38.60:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/\/%7Erick\/\/charts\/2016\/170420NEWR1.png\" alt=\"$NEWR DAILY\" title=\"\"><\/p>\n<p>After a few days of light volume chop, $NEWR sold off with the market on April 13,\u00a0but swiftly bounced back after closing in the top third of the day&#8217;s range and finding support at the breakout pivot.<\/p>\n<p>The reversal action on an ugly down day in the market reveals $NEWR&#8217;s relative strength, which should be your <a href=\"https:\/\/www.morpheustrading.com\/blog\/relative-strength-trading\/\" target=\"_blank\">main trading focus<\/a> in the current market environment.<\/p>\n<p>Because of its relative strength, $NEWR also has a good shot at becoming a new leading stock when overall market conditions improve.<\/p>\n<p><a href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\"><strong>Subscribe now<\/strong><\/a>\u00a0to be alerted of our exact entry and exit points in $NEWR and other top relative strength stocks setting up for swing trade buy entry.<\/p>\n<p><center><script src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\" async=\"\" type=\"text\/javascript\"><\/script><!-- Footer of content --> <ins class=\"adsbygoogle\" style=\"display: inline-block; width: 300px; height: 250px;\" data-ad-client=\"ca-pub-7565144363001883\" data-ad-slot=\"7002222565\"><\/ins><script type=\"text\/javascript\">\/\/ <![CDATA[ (adsbygoogle = window.adsbygoogle || []).push({}); \/\/ ]]><\/script><\/center><\/div>\n","protected":false},"excerpt":{"rendered":"<p>San Francisco-based software analytics firm New Relic ($NEWR) is a relatively new IPO from late 2014 with\u00a0explosive potential. Continue reading to see why this stock is so hot. With $NEWR forming a tight-base near the highs its two-year trading range, let&#8217;s walk through the charts of multiple timeframes to analyze the breakout setup. The Big [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[5],"tags":[],"class_list":["post-4983","post","type-post","status-publish","format-standard","hentry","category-stock-picks-analysis"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4983","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=4983"}],"version-history":[{"count":0,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4983\/revisions"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=4983"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=4983"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=4983"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}