Friday, October 15, 2010
What Have Been The Winning Patterns Lately??
It's time for a report card check on some recent stocks i gave you and time to check out which ones have been not only the big winners BUT also THE MOST CONSISTENT winning patterns! Been scanning tonight, not for NEW stock setups! I have been scanning thru my previous stock picks: Stock picks i have given you guys here! Some of you will surely recognize some of these names.
"BOTTOMING FORMATIONS" have won the prize hands down during stock selection process for best performing and generating the most number of winners! Best part about a bottoming formations: RISK is relatively low on entry but reward is HIGH!
What is a BOTTOMING FORMATION? good question! A BOTTOMING FORMATION is typically the price action ones sees in a stock after a sustained decline: The stock will go a "repair" phase after taking a serious beating. This "repair phase" takes weeks, months or some times years to wash out ALL the sellers from a stock. After a sustained decline, the stock will subsequently move sideways of slightly downwards essentially creating A BASE; Essentially washing out all big sellers: in some cases leaving only late to the party SHORT SELLERS who will eventually have to cover these short positions if/when the stock starts to create HIGHER LOWS and ramp higher, creating an even more aggressive SPIKE in prices.
HIGHER LOWS on increasing volume is a KEY part of spotting bottoming patterns. When spotting a bottoming pattern, make sure to spot HIGH volume activity in the stock as a HIGHER LOW is being created. This will be your cue that something is brewing and "SOMEONE" KNOWS SOMETHING and is buying big blocks of the stock to capture further upside.
STOCKS PRICE ACTION and VOLUME are the only two components to proper chart work and stock selection.
Hope this helps!
Attached charts are of recent stock picks i shared with folks on twitter but mostly ART OF TRADING members. Check out and see for yourselves how these picks fared. Some of these even triggered TODAY!
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- Q&A with ART OF TRADING Members
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- My Watchlist For This Week
- Lower Priced Stock Setups
- New Stock Setups and Random Musings
- Cash Is King
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- ART OF TRADING Member Clears $4000 On One Trade!!
- Awesome Day At The ART OF TRADING!
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- ART OF TRADING Premium Site
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- stock rook goes pro
- Stock Virtual
- The Market Guardian
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- Trader9999 blog
- Trading Momentum blog
- Trading With Average Jay
- Wall Street Warrior