This is because you have a stock that is very oversold with a strong long term trend that is showing signs strength both before and after a selloff. File Size: 533 MB
Explosive Bottoming Patterns
This technical setup is the best performing short-term strategy, even if earnings season is over. It can be used for hold times between 1 and 8 days. Particularly for stocks with a 200-day moving mean.
Stocks moved 10% to 15% last week within two days of this pattern. Recent back-tests indicate that there is an 80% chance of success within a week-and-a-half with a tight stop-loss of 3.5%
This works because you have a stock with excellent long-term trends that is oversold and showing signs of strength during trading hours following a sell-off.
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For most traders, the missing piece is defining the fundamentals and the gap between technical entry point and next level of resistance. You don’t want to buy an oversold stock. It’s a very high probability trade with huge upside if you do it right.
