SPRINGAccumulation trait

Spring: undercut and recover

The spring pattern, where a stock dips below a recent low and closes back above it, and how Breakaway detects it.

What it is

A spring is a false breakdown. The stock dips below a recent low, which triggers stop orders and draws in short sellers. Then it closes back above that low the same day. Everyone who sold the break is now wrong, and their buying back pushes the price up. Richard Wyckoff named the pattern a century ago. It still works, because stop orders still pile up under obvious lows.

How Breakaway uses it

SPRING fires when the day dips below the 10-day low and recovers to close above it. It is an accumulation trait. It is rare and it does not last long. The Fresh list, which shows stocks whose score rose today, is the best place to catch it.

How to read it

A spring inside an uptrend, at the 21-day or 50-day moving average, is one of the higher-odds entries there is. The stop goes just under the spring low, so risk is small and clearly defined. A spring in a downtrend below a falling 200-day is usually just a bounce. Read it with the regime, which says whether the stock is trending or choppy.

Related

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