Yesterday on twitter I posted a nice BULL FLAG setup in YY (a stock who I have @WallStJesus to thank for bringing to my attention).
I wanted to do a quick blog post today on WHY I liked this setup so much and also HOW to spot them next time you are scanning for stocks to trade.
First of all, you must understand what a BULL FLAG looks like, please learn to look for these patterns as they are truly one of the most consistent and profitable patterns out there.
Here's what a typical bull flag looks like:
Here's the original YY setup I posted to ART OF TRADING members and also on twitter yesterday:
..... and here's how YY did today!
Now I'm gonna show you this same pattern in 2 other stocks that set up almost the same exact pattern this week: Now, I like to look to classic BULL FLAGS and I also add one VERY important element to my BULL FLAG setups.... VOLUME!
Price and Volume is all you really need to trade, everything for the most part is not really necessary.
When I look for volume in my BULL FLAGS, i'm looking for HUGE volume, aka ACCUMUALTION! Accumulation is basically super heavy volume that comes into a stock on UP days indicating very STRONG institutional demand for a stock. Institutions is what moves stocks so when I see accumulation volume come into a stock for several days in a row, that makes me pay close attention to this stock and so should you!
Here's the same BULL FLAG pattern in CYOU and SOHU but more importantly look at the VOLUME PATTERNS! Look at that massive accumulation volume as the stocks work their way higher, strong volume accumulation continues to pump into the 3 stocks.
Very strong indication, institutions WANT IN !
Do you see any similarities between CYOU, SOHU and YY?
Will you be able to spot this pattern?
I'd love to hear your comments, feedback, questions on this post!