I’m about to do something that’ll probably sound insane…

I’m looking to buy a stock that just failed to break out.

Here’s why…

I’ve been watching a particular pattern repeat over and over. You get a really nice chart that looks primed for a breakout. If it doesn’t break out, it tends to get a false breakdown. Then… it does exactly what you thought it would do.

It’s not obvious at first. But once you know what to look for, you’ll start seeing it everywhere.

Let me show you what I mean with Lemonade (LMND)… before I tell you which ticker I’m watching now.

Last month, we were in Lemonade – my pick of the month for my Daily Profits Live subscribers.

This thing had squeezes on SIX time frames. There were squeezes everywhere. It was wild.

But it couldn’t break out. And then what happened? We got a false breakdown instead of the breakout we expected.

And then BOOM – the stock did exactly what we thought it was going to do in the first place.

Now I’m seeing this exact pattern in Stride Inc. (LRN).

We’ve got a perfect chart – earnings winner, high short float, big gap overhead at $95.

Everything about this chart is textbook.

But on Monday, instead of breaking higher, we got a little breakdown right into support around $87.

My AI scanning tool – S.A.M. – shows LRN has a volume buzz of negative 76%. What that means is LRN is pulling back on basically no volume. There’s no conviction behind this move down.

This is crucial. Not all breakdowns are created equal.

When you see a breakdown on massive volume with conviction, that’s different.

When you see a breakdown on anemic volume into obvious support? That’s often a false breakdown.

So let’s summarize what I’m looking for…

Follow These Five Steps

Here’s how to spot these setups…

1. Start with the perfect chart: Look for multiple technical catalysts – squeezes, gaps, earnings momentum
2. Watch for the fake: When the expected breakout fails and turns into a breakdown, check the volume
3. Check where it lands: Is the breakdown stopping at logical support? That’s your clue
4. Read the volume: Low-volume breakdowns often reverse. High-volume breakdowns often continue
5. Have your levels ready: Know exactly where you’ll add, where you’ll stop, and where you’ll take profits.

Your Action Plan

Here’s what I think happens with these perfect setups: everyone gets positioned the same way. When the obvious breakout doesn’t happen immediately, weak hands bail and create the false breakdown.

But the original thesis hasn’t changed – the fundamentals are still there, the technical setup is still there. You’re just getting a better entry point because scared money is handing you their shares at support.

Full transparency – I actually tried this trade on Monday morning. I bought LRN calls expecting that initial pop higher, and when it went the other direction instead, I stopped myself out.

But that’s exactly what makes me more interested now, not less. The breakdown happened on no volume right into support, which tells me this is probably a false breakdown setting up the real move.

I’m not saying every failed breakout is a buy – some breakdowns are real and will burn you.

But when you see a low-volume breakdown into obvious support on a chart that still has all its technical catalysts intact, that’s when weak hands are handing you their shares at a discount.

If it goes against me again, I’ll stop out again.

But I’d rather take this setup than chase a breakout that’s already extended.

Let AI Do the Grunt Work

I mentioned S.A.M. earlier – my AI scanning tool.

This is exactly what it’s built for. S.A.M. scans thousands of stocks every day, looking for the patterns I trade, like this false breakdown setup in LRN.

It flagged the negative 76% volume buzz, the pullback into support, and the original thesis still intact – all before most people even noticed the stock pulled back.

That’s the difference between reacting to moves and being ready for them.

If you want access to S.A.M. to see these high-probability setups before they reverse, you can learn more here.

It’s the same tool I’m using to spot plays like LRN. Once you start using it, you’ll wonder how you ever traded without it.