TCBI - Low Volume Breakout

Now that we can look at yesterday's action on TCBI  ( Texas Capital Bancshares )  We can see that the volume at the end of the day was around 611k shares which ended up being around 31% of the average daily volume when you calculated the past 50 days of volume data.  Although there was more attention being  paid to this stock on the break out day, you should want to see the volume be greater than 40% to 50% .  This shows you that institutions (Hedge Funds, Mutual Funds, and Brokerage Banks) are interested in this equity and are adding it to their coffers.

So now we have two strikes on this  stock.  The first is that the last week of the 3 weeks tight pattern did not finish under or at 1%.  The second is that on the day of the breakout from the pattern, it did not have the volume you want to see to confirm that it is still being loved by the heavy lifters of the market.  Add to this that it opened up at $44.71 on the 20th which ensures that if you did not buy this in the pre-market then you may have paid a little bit more than you wanted to.

Now this stock shouldn't be discounted yet,  We may have just started a small pull-back in the general market and it is relaxing it's relentless move upwards.  If you are an O'Neil practitioner and want to stay in this buy point, then you might want to bring in the stops from the standard -8% stop loss to something more conservative like 2%-3%.  We are finishing the summer chop session and the environment should get more stable until the election season winds down.  Let's take a look at this tomorrow and see if it warrants our continued love.