False Impressions

False breakouts and false breakdowns happen all the time in the market. In fact, if you look hard enough you can find one every day. Frankly, I'm not willing to look that hard since there usually isn't a trade to be had in these names. Still, they have good value in studying from time to time in the hopes that one can recognize them quickly when it happens to a name you buy or short. Three names showed up on some of my scans Tuesday night that looked like they would make great examples for the three different categories a "falsie" can fall into: reversal, neutral or pausing for another breakout attempt.

First up is a look at the reversal. Tuesday, Neonode (NEON) put an early morning scare into its 25% short interest. But as quickly as the push higher began, it also ended. NEON's price broke out from a bullish flag during the day, but failed to close above the flag. The false breakout has since turned into a nasty breakdown. Buyers from Tuesday are already down anywhere from 5% to 15%....337 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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