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CAVA opened up above the prior day’s high and closed back below its break-out line. Breakouts sometimes fail and if someone bought at Thursday’s open they would have a large loss. I find it more difficult  to control my loss with a failed break-out. Where should one place their stop loss? It is not always easy to designate that in advance. However, with the OSB (oversold bounce) set-up it is much easier to determine the price where the set-up has failed. Place the stop just below the low of the bounce, the placed where the black dot appears. Look at CAVA’s chart and compare it to the chart of MLM with an OSB.

The black dot shows the days of the OSB set-up.

When I look through charts, I place an alert in TC2000 to tell me the instant a stock climbs above a horizontal line I have drawn at the stock’s recent peak. CAVA was too new to form a green line top, which requires a minimum of a 3 month consolidation after reaching a peak. However, when I see a recent IPO, like CAVA,  that has formed a short base I draw a  line at the peak and enter the alert in TC2000, good for a year. Wednesday morning I received a text saying the alert on CAVA had been triggered. I immediately purchased a little.  See how CAVA performed. IPO break-outs from a base can be very profitable. If CAVA should close back below its break-out line, at 47.89, I would immediately exit.

MLM just retook its green line after a recent GLB to an ATH.