For investors using a technical breakout method, the goal is to find stocks that are both technically sound and ready for a possible price increase. This method focuses on two key questions: which stocks are in a good upward trend, and when is the best time to enter that trend? A typical way to answer these questions is to look for stocks showing both a high technical health score and a high setup quality score. The first shows a solid existing trend, while the second indicates the stock is moving in a narrow range, possibly preparing for a clear breakout move. This two-step filter method seeks to find chances in leading stocks as they start their next upward phase.
Technical Health: A Firm Base
The first part of a breakout setup is a firm technical base. FIRST INDUSTRIAL REALTY TR (NYSE:FR) receives a ChartMill Technical Rating of 7, which places it as a stock in a confirmed upward trend. This rating comes from studying several time periods and technical items, and a score of 7 or more is an important filter for breakout screens as it helps separate market leaders from weaker, flat, or falling stocks.
A detailed view of the technical report shows the details behind this rating:
- Trend Agreement: Both the short-term and long-term trends for FR are rated as positive. This agreement across time periods is a very positive signal, showing continued buying interest.
- Price vs. Averages: The stock is priced above all its main simple moving averages (20, 50, 100, and 200-day), and each of these averages is itself in a rising pattern. This layered agreement of support levels is a standard feature of a good upward trend.
- Relative Performance: While FR's one-year performance is better than 58% of the market, making it an average performer, its recent movement is more notable. The stock has risen almost 22% over the last six months and is now trading only 1.9% below its 52-week high of $60.79.
This mix of positive trends, firm support from moving averages, and nearness to new highs gives the "which stock" answer for technical investors: FR is a fundamentally sound chart within its industry.
Setup Quality: Finding the Entry Point
A strong trend by itself is not a buy signal; entering after a fast rise adds risk. The second important filter is the Setup Quality Rating, which measures how narrow and orderly a stock's recent price movement has been. A high score points to a period of consolidation, giving a more defined entry point and a sensible level to set a protective stop-loss order. FR has a very good Setup Rating of 9, making it a leading choice for this method.
The technical report explains why the setup is rated so well:
- Consolidation Pattern: Over the last month, FR has moved in a set range between $56.71 and $60.79. It is currently testing the top limit of this range. This time of consolidation after an upward move lets the stock absorb its gains and form a base for the next possible rise.
- Defined Support and Resistance: The study finds a firm support area between $56.86 and $58.85, created by a combination of trendlines and moving averages. Just above the current price, a resistance level is seen at $59.91. A clear move above this resistance could show the beginning of a new breakout move.
- Supportive Measures: The report notes higher buying interest from large participants recently, as seen in volume study, and the presence of a "Pocket Pivot" signal, a positive price/volume pattern that often comes before breakouts.
Based on this setup, the report proposes a possible trading plan: an entry order could be set just above the $59.91 resistance (for example, at $59.92), with a stop-loss order set below the main support area near $56.75. This states the risk clearly, which is necessary for controlling position size.
Conclusion and Following Actions
FIRST INDUSTRIAL REALTY TR shows a standard case for technical breakout screening. It has the two qualifications looked for by this method: a Technical Rating of 7 confirms its place in a maintained upward trend, while a Setup Rating of 9 shows it is coming out of a narrow consolidation near resistance. For investors following this approach, FR represents a stock where the "when to buy" question is answered by a defined level to watch for a breakout confirmation.
Screens like these are used each day to find new chances as market situations change. You can find the present list of technical breakout setups by visiting the Technical Breakout Setups screen.
Disclaimer: This article is for information only and does not form investment advice, a suggestion, or an offer to buy or sell any security. The trading setup noted is an automatically created example for illustration and is not a prompt to make a trade. Always do your own study, think about your risk comfort, and talk with a qualified financial advisor before making any investment choices. Past results do not guarantee future outcomes.
