Upthrust is a failed breakout in an event of a stock rally. The stock moves above a resistance line and fails to follow through. It also has a potential of downward reversal. Normally the day of the upthrust occurs with high volume; usually after the good news is released. In Malaysia, we don’t have short selling to trade upthrust which trader borrow stock from broker and sell it in the market. Otherwise it would be a good opportunity.  

Let’s look at a few examples in 2019:

  1. Ekovest
  2. 22 April – Gap up with high volume.
  3. 23 April – Gap down with high volume. The volume is similar to 22 April.
  4. 24 April – Increase 8 percent in a day.
  5. 25 April – Breaks resistance in the morning session and close below the resistance. Volume similar to 23 April. That’s the upthrust.
  • Huaan
  • 14 March – increase 32% in a day with very high volume.
  • 4 April – open higher but close at lower price. That’s the upthrust.
  • Sapura Energy
    • 15 March – The stock looks like increasing with high volume
    • 18 March – The stock fails to increase further.
    • 8 April – A false breakout with high volume. That’s the upthrust.

Some retailers like the excitement of stock is going up and afraid of not getting a cut from the rally. That’s the time retailer gets stuck and lose money. Remember, don’t trade with excitement except you have the superpower of good luck.

Author: Gerald Koh