Class: Bearish, Day, Reversal, Early

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Bearish

Focus on stocks that are in a longer term down trend and have recently rallied to a resistance level.
Avoid stocks that are in a steep up trend or have risen 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 drop 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.

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