Class: Bullish, Week, Reversal, Early

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Bullish

Focus on stocks that have corrected more than 10% in the last few months, but still have a two to three year up trend.
Look for recent relative strength to the market.
The potential up reversal should be forming above the two-year trend lines and ideally above the 200 day moving average.
The pullback should be the result of sector rotation or a drop in the overall market. Avoid stocks that are relatively weak within their sector and have recently released material negative news.
Rallies should be accompanied by volume increases.
Look for signs of strength by using technical indicators like RSI and Money-flow.

Week

Look for fairly deep troughs within a two-year up trend. The trough will provide the stock with plenty of “head room” to move higher over the course of a week or two.
This trade may take days to unfold. Try to scale in and average your entry cost.
Give the trade some breathing room and don’t place protective stops too close. Longer-term support levels can be used for protective stops.
The profit/loss percentage per trade will be larger than it is for Day trades. You don’t want to get “shaken-out” of a sustained move so you must be willing to give the trade more latitude.
If overall market conditions are deteriorating, consider reducing the position.
If the move has not materialized in a week, exit the position and keep the stock on a watch list for future consideration.

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One Option