BDRE Bullish, Day, Reversal, Early Trend
This search identifies stocks that have recently pulled back and are now
reversing higher on an expanded daily range. Read all of the tutorials to get a
feel for what you should be looking for and then view the symbols to find
stocks that conform to this set-up.
Stock Option Setup Search Criteria: Greenline
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The average daily range has expanded recently.
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The average daily volume is greater than 300,000 shares.
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The stock has opened near its daily low and is trading near its daily high.
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The stock has traded lower the last 10 days relative to the last 30 days.
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The stock has traded higher the last 5 days relative to the prior 10 days.
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The last trade is greater than the 5 day high.
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The stock is currently trading above yesterday's close.
This stock made a significant Greenline at the beginning of the
chart. It continued higher for a couple of weeks and then it began to
consolidate. During the last two weeks it has regained its footing and today it
has rallied off of that support.
The trade is considered early because it has not confirmed. In order to confirm,
the stock should close near its high of the day and preferably penetrate a
resistance level. In some instances the results will show stocks that are up
big. Use caution since a trade above resistance does not constitute a close
above resistance. As the end of the day approaches, it will become more
apparent if the stock will hold its gains and/or confirm. This is a nice
reversal trade because the reversal allows us to join the longer-term trend
higher.
If we take a closer look, we can clearly see the support and resistance levels.
If the stock closes near its high today, it should be purchased. A protective
stop should be placed at the upward sloping trend line and trailed higher if
the stock moves up. The lower horizontal support level would not be considered
for a stop since the character of the price movement would have changed by the
time the stock got there. We are looking for a short-term move higher, and as
the stock moves toward the upper resistance level profits should be taken.
These trades are considered Day trades because they are
reversing a recent short-term down trend. In some cases the only sign of a
reversal is the strength of the current day. You will see some candidates that
have made very large moves of 10% or more in one day. These trades are usually
very effective, however, it is often best to wait until the next day to see if
any of the gains are given back on the open. Once the stock stabilizes and
resumes its rally, initiate a position. Often a longer-term chart will help you
gauge the strength of the stock.
This is a weekly chart, and it shows a very nice breakout 10 weeks ago. It is in
a longer-term up trend and it looks very strong. In this particular instance,
we are looking to profit from the stock as it tests its high.
Within 3 days, your position should be reduced to at least half its original
size. Remember, this is a momentum trade and we are interested in quick
results. Consider adding this stock to a longer-term watch list. A nice
pullback to the long-term trend line may qualify this stock for future Bullish/Week/Continuation
trade.
Notice that his stock has also reversed a recent sell-off. The Greenline today
has moved the stock to a short-term resistance level that was the result of the
sell off 10 days ago.
This stock is very weak. Given the magnitude and speed of the recent drop, this
stock has to spend more time working off the "bad news". Try not to pick stocks
that have only demonstrated one day of strength and have recently made dramatic
moves. These are low probability trades. If a trade were initiated, even a
small move higher would take it to a resistance level. This trade has a very
poor risk/reward profile.
This is a weekly chart of the stock. It has just tested long term support and
over the last six months it has made some dramatic moves lower.
This stock has a bearish under tone to it and in six months it has gone now
where. It should not be considered for a bullish trade of any duration.