Stock Option Class

BDCE: Bullish, Day, Continuation, Early

Bullish Stock Trade

Focus on stocks that are in a powerful short-term up trend.
Look for stocks that have steady (not choppy) upward price movement.
The stocks should not have pulled back more than 5% off of their recent high. Ideally, they have been moving side ways and appear to be resting.
The stocks should be above their 20-day moving average.
Price increases should be accompanied by higher volume.
A nice market rally may help propel these stocks higher.

The powerful up trend may lose its steam quickly. Get in, place protective stops and as the stock moves higher, trail the stops higher.
If the stock produces nice gains, take partial profits and reduce overnight exposure.
Seek small, quick, consistent profits.
Exit the trade if the market rallies and the stock does not.
Exit the trade if the move does not materialize by the end of the next day, or the stock looks like it is meeting overhead resistance (“heavy”).

Look to join a short-term rally that is in progress. The stock should have good momentum.
The search will identify strong stocks that are moving sideways or have pulled back slightly.
Avoid stocks that are trending higher but are very volatile.

These stocks are close to breaking out above a critical price level. Some of them are “on a tear” and the critical price level might simply be the high for the last two or three days.
Be prepared to look at many stocks that are performing well during the current trading day.
The rally may be overextended and the stock may not follow through the next day.
The risk/reward ratio for carrying overnight trades is high.
Don’t get greedy. If large profits materialize, take them.
If these trades move through the critical price level they will “confirm” and will be classified as: Bullish/Day/Continuation/Confirmed .