Stock Option Class

BWCC: Bullish, Week, Continuation, Confirmed

Bullish Stock Trade

Two types of stocks can be identified in this search. One is in a long term up trend and the other has gone through a long-term basing pattern and is now showing signs of strength.
Look for stocks that are in a tight ascending pattern.
Overall market strength will enhance the probability of success.
A tight upward sloping trading channel with a 30-45 degree angle produces the most reliable results. The steeper the slope of the trend line, the greater the chance of a reversal. The longer the duration, the more legitimate the trend.
Watch for overall sector strength.
Rallies should be accompanied by strong volume.
These stocks are in the upper or lower quartile of their 52-week range and they should be trading above the 50-day moving average.

The longer-term trend will give us the confidence we need to “climb aboard” and hold overnight positions.
Try to avoid volatile stocks with big daily ranges. We don’t want to get “shaken out” of a sustained move. Trade much smaller positions when trading volatile stocks.
If overall market conditions are deteriorating, consider reducing the position.
Place protective stops near long term support areas.

Focus on strong steady trend lines.
Tight upward sloping channels depict strong moves. Each time a seller steps forward, the supply is quickly gobbled up and the chart never even registers a blip. The stock just keeps grinding higher. A stock that has many buyers and sellers will be much more volatile. As long as there are more buyers than sellers, the stock will continue higher. However, you may get shaken out of the position.
If the stock stalls for more than a week, exit the position and keep it on your watch list for future consideration.

These stocks have moved through a short-term resistance level and have “confirmed” that they are ready to resume the trend.
Attempt to scale-in and average your entry price over a number of days.
Be patient.