Class: Bearish, Day, Reversal, Confirmed

Part 1 | 2 | 3 more pages...

Bearish

  • Focus on stocks that are in a longer term down trend and have recently rallied to a resistance level.
  • Stocks should be below their 100-day moving average.
  • Avoid stocks that are in a steep up trend or have run up more than 30% in the last three weeks.

    These situations are very risky and should only be considered by seasoned traders.

chart

 

Day
  • The rally is temporarily overextended and the probability of a nice, quick pullback is high.
  • Use tight protective stops.
  • Closely monitor the positions.
  • Exit the trade if the move does not materialize in a day or two.
  • Seek small, quick, consistent profits.
Part 1 | 2 | 3 more pages...