Ready to Break Out? (YUM)
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If you study what triple-digit-return traders do, you find they all seem to do the same thing.
They trade “breakouts from a tight base.”
In other words, they want price to condense down into a very tight channel.
Why?
Because when prices condense, that means an explosion is coming – just like a tightly coiled spring.
And if it’s going to be an upward explosion, famous traders like to see some previous upward momentum.
The idea is this:
- A stock moves up.
- A stock hesitates and gathers energy.
- A stock explodes for a big gain.
And all of that is happening right now on Yum! Brands (YUM).
YUM has been mostly rising since 2021 and it’s been rising nicely since fall of last year.
And now it’s in a tight channel:
If we get more bullish market momentum and see a break above $133.77, YUM could explode from its consolidation and make a nice run.
We’ll keep an eye on it.
Happy trading,
Scott
