Short lessons on momentum trading, every day.

Most Traders Only Notice the Breakout After It Is Too Late

ASML is a good example of why price action matters.

Before the breakout, the stock built what looks like a Minervini-style VCP.

The contractions were roughly:

-19.3%

-10.9%

-10.1%

-4.4%

That is volatility contraction.

Not perfect, but it clearly showed the characteristics of tightening up the right side of the chart.

The stock held near the upper part of the base, tightened up, and then broke through the pivot area around $1,545.

Volume dried up on the final contraction, and demand started coming back in as price moved higher.

The breakout volume was not massive, so it was not textbook perfect, but the bigger point is that supply was drying up before the move.

That is the kind of setup growth traders should train their eyes to find.

Tighter price action.

Smaller pullbacks.

A setup that allows for tight risk and the potential to make multiples of what you risk.

The Most Ignored Letter in CANSLIM Is Why This Stock Took Off

Most investors know CANSLIM. Very few actually use all of it.

William O’Neil repeatedly emphasized that the biggest winners are not powered by charts alone, or even great numbers alone. They are driven by something new that creates demand big enough to force institutions to act.

That letter is N.

New product. New service. New technology. New way of doing something the world suddenly needs.

Ironically, this is the letter I see people focus on the least. Even me at times.

Why “New” Matters More Than People Think

Strong earnings and sales can tell you what is happening. The N tells you why it can keep happening.

True super-performers are not just benefiting from a good cycle. They are tied to a structural shift that creates persistent demand. That demand is what supports large sales growth, expanding margins, and long runs in price.

Without that, many stocks end up being decent movers, not generational leaders.

ASML Is a Perfect Real-World Example

ASML is not just another high-quality semiconductor company.

It sits at the center of a new way to manufacture advanced computer chips that the entire industry now depends on. Its extreme ultraviolet lithography technology has become essential for producing leading-edge chips. Without it, progress would have slowed dramatically.

That is the N.

Understanding why ASML matters gives you conviction. It explains why demand is so strong, why customers have little choice, and why the fundamentals continue to confirm the price action.

Now Look at the Stock

Once the story is clear, the chart speaks louder.

• Clean cup with handle structure

• Tight action near highs

• Volume supporting the breakout

• Relative strength near the top of the market

The fundamentals confirm it:

• Strong earnings and sales growth

• Return on equity around 48%

• Operating margins above 30%

This is price, fundamentals, and N aligning.

The Takeaway

You do not need to predict the future. You do need to understand what is new and why it matters.

That extra work changes how long you hold winners, how you handle pullbacks, and whether you sell too early just because something feels extended.

That is what O’Neil meant by N.

The market eventually makes the decision for you. Your job is to understand why it might keep saying yes.