Qullamaggie breakout setup explained with examples

Summary

The video explains a momentum breakout setup: find an exceptionally strong stock after a major advance, wait for a tight consolidation near rising moving averages, and enter when it breaks above the range. The presenter says the setup works best for market leaders in a strong “impulse” market.

Setup and entry framework

• Find a leader: Look for a stock among the strongest 1–2% over a recent one-, three-, or six-month period, after a substantial move.
• Wait for consolidation: The stock pulls back or moves sideways, then tightens into a narrow range and forms higher lows, often holding near a rising 10-, 20-, or sometimes 50-day moving average. The presenter favors the 10- and 20-day averages, especially the 20-day.
• Check relative strength: Prefer stocks that hold up or make higher lows when the broader market is weak.
• Enter a breakout: Buy as price breaks above the consolidation range, using the high of the opening range. The presenter says this can be based on the first 1-, 5-, or 60-minute candle. Shorter intervals can provide earlier entries, but may have a higher failure rate and lead to being stopped out before re-entering at a higher price.
• Manage the trade: One example uses a partial sale of one-third or one-half after 3–5 days, moves the stop to breakeven, then trails the remainder using the 10-day moving average. Exit if the stock closes below that average.

Market context and examples

The presenter defines an “impulse” or momentum market as one where both the 10- and 20-day moving averages are rising and the 10-day is above the 20-day.

Examples include Shopify, Tesla, and Fastly. The presenter describes tight consolidations, higher lows, moving-average support, and breakouts in these stocks, and says they traded some of the examples.

The strategy aims to capture the middle of a strong market move rather than trying to buy the market bottom.

Numbers and claims

The presenter reports gaining more than 200% in the prior four months. This is a personal performance claim and is not independently verified in the subtitles.

Moving-average references include the 10-, 20-, and 50-day averages; opening-range references include 1, 5, or 60 minutes.

Risks and disclosures

Shorter-timeframe breakout entries may fail more often, potentially resulting in a stop-out and a later re-entry at a higher price.

The subtitles contain no explicit financial-advice disclaimer.

Presenter and source: An unnamed first-person presenter; video from Qullamaggie Playlists.