Method IV — Confirmed Breakouts

Bollinger on Bollinger Bands System IV, a simple and direct approach to confirmed breakouts. The basic pattern is a three-day sequence.

Day 1: Close inside the band and bandwidth within 25% of lowest bandwidth in 6 months.
Day 2: Close outside the band.
Day 3: Alert (not yet confirmed) if we trade higher (lower for sell patterns) than the close of day two.
                     Signal (confirmed breakout) if we close higher (lower) than the close of day two.

In essence we are looking for stocks that are strong (weak) enough to get outside the bands and then extend their moves.