{"id":5176,"date":"2017-11-06T09:35:18","date_gmt":"2017-11-06T14:35:18","guid":{"rendered":"http:\/\/www.morpheustrading.com\/blog\/?p=5176"},"modified":"2017-11-06T09:35:18","modified_gmt":"2017-11-06T14:35:18","slug":"mzor-breakout-trade","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/mzor-breakout-trade\/","title":{"rendered":"$MZOR Breakout Trade Review: +57% Gain On A Two-Month Hold"},"content":{"rendered":"

\"$MZORWe recently bought Mazor Robotics ($MZOR) as a breakout trade, held it for two months, then sold for a gain of +57.6%. Continue reading to find out why we picked this stock for buy entry, and how we determined when to sell for maximum\u00a0profit.<\/h2>\n

Israeli medical device manufacturer Mazor Robotics ($MZOR) first caught our attention as a potential breakout trade in late August of 2017.<\/p>\n

Listing the trade setup in the August 23 issue of The Wagner Daily<\/em><\/a>, we said:<\/p>\n

The market timing model remains in neutral, but we do have one new official buy setup in $MZOR.<\/p>\n

$MZOR has tightened up on the weekly chart the past two weeks after a false breakout above $43. The price and volume action has dried up at support of the 10-week moving average, which is a bullish sign. We are placing a buy stop order above $39 with a stop below the range lows on a closing basis. $MZOR does have impressive revenue growth the past several quarters (but no eps) and a 96 RS ranking from IBD.<\/p><\/blockquote>\n

The annotated daily chart below shows how the trade setup looked when $MZOR was listed in the newsletter:<\/p>\n

\"$MZOR<\/p>\n

On August 28, $MZOR triggered for buy entry when it broke out above the highs of the range ($39.30 entry).<\/p>\n

The trade began moving in our favor immediately after buy entry, which is typically a great sign for a breakout trade.<\/p>\n

After the first entry, we planned to add to the position above the two-day high of August 28 and 29.<\/p>\n

However, the price action was so strong that Mazor Robotics<\/a> gapped sharply higher on August 30, well above our planned second entry point (above the two-day high).<\/p>\n

Rather than chasing the price action, we decided to patiently wait for a pullback or other low-risk buy entry to develop.<\/p>\n

That opportunity for adding shares arrived two weeks later, as the stock pulled back to near-term support of its 20-day exponential moving average (20-day EMA).<\/p>\n

We set a buy stop above resistance of the short-term downtrend line that formed during the pullback, enabling us to buy $MZOR at $45.11 on the second buy entry.<\/p>\n

We also set a protective sell stop just below the 20-day EMA, minus some “wiggle room” to avoid a shakeout.<\/p>\n

Both buy entries are shown below:<\/p>\n

\"$MZOR<\/p>\n

Much like the first entry, our second buy entry began working out right away.<\/p>\n

Mazor Robotics rallied 13% higher over the next five days, before stalling just above $50.<\/p>\n

After a few more days, $MZOR regained its bullish momentum and resumed its steady uptrend over the next few weeks.<\/p>\n

This allowed us to hold the full position until October 25, at which time the additional shares hit our tight trailing stop (beneath the prior day’s low at $53.30).<\/p>\n

In hindsight, the stop was probably too tight because the stock was still above the 20-day EMA.<\/p>\n

However, our goal was to lock in a 20% gain on the additional shares — we scored an 18% gain instead:<\/p>\n

\"$MZOR<\/p>\n

After perfectly finding support at its 20-day EMA again, $MZOR rocketed to new highs with an additional gain of +20% over a four-day period.<\/p>\n

With an October 31 closing price of $64.56, we tightened the stop on our original shares to $61.95 to lock in profits in case of pullback.<\/p>\n

As anticipated, Mazor pulled back the next day and knocked us out of the remaining shares with a gain of\u00a0+57.6%<\/strong> (from original buy entry of $39.30):<\/p>\n

\"Breakout<\/p>\n

Thanks to this stock’s share price gain of 57.6%, subscribers who bought just 14 shares<\/em> of $MZOR when we first listed the trade made enough profit to cover the cost of a full-year subscription to The Wagner Daily<\/strong><\/em><\/a>.<\/p>\n

Just 100 shares would have made you enough dough to cover an annual subscription ($299) for the next 7 years.<\/p>\n

Obviously, breakout trading is not always this smooth.<\/p>\n

But you can clearly put the odds of success in your favor by making sure your breakout trade setups always have the\u00a0five qualities of the best stock breakouts.<\/a><\/p>\n

What is your favorite type of breakout trade setup? Drop a comment below to join the discussion.<\/em><\/p>\n