Don't be fooled here – not all trendline breaks work this well. But it does go to show you what can happen. When PCS traded below the June low, every single trader/investor who bought the stock in the previous 9 months was showing a loss. As the stock dropped and more and more stockholders became frustrated, fear turned to panic and the stock completely collapsed when everyone tried to run for the exit.

ARW was in a steady downtrend and then traded sideways with resistance established at 15. The pattern trading action didn't exactly fit any of our “canned” patterns discussed in this section, but it was still playable when support was taken out…just a simple continuation pattern.

EXTR formed a large pattern that neutralized whatever downside momentum existed when the stock finally started trading sideways in March. The stock could have broken either way, but in this case, once support was taken out, volume ramped up and the stock continued its move down.

WBSN was in a steady downtrend when it paused at this trendline that fell into the “continuation” category. Once support was broken, volume picked up, and the stock continued its move down.


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