Reversal Patterns – Trading Explosive Bottoms this Week

June 23, 2017 by  
Filed under Chart Patterns, Swing Trading

 

 

This past week we saw several explosive bottoming patterns break out strongly. We traded a couple on lower priced stocks that made enormous moves after reaching the ideal entry point out of this chart pattern.

 

Normally we like to swing trade this very bullish reversal pattern on stocks above $20 because they are more reliable yet often make big moves. For instance, RH recently moved about 30% within 2 weeks after breaking out of the explosive bottoming pattern.

 

Stocks under $10 can make a huge move faster out of this candlestick reversal pattern. However, the failure rate is higher.

 

However, one great way to improve accuracy on this trade is to wait for the first strong five minute candle after the breakout. And then jump in only if the next five minute candle breaks the prior candle high

 

This seems to be one of the best ways to play the breakout on riskier stocks under $10. Day traders can use this strategy and play with a 1.5% stop-loss.

 

In this latest video, I talk about the trade on XBIT this week that moved about 25% within an hour or so after breaking out of the explosive bottoming pattern, our #1 candlestick reversal pattern

 

We caught the 2nd wave higher after a consolidation as we were profiting on the same pattern on AMAG.

 

View the video to see a great real life example of how to play this pattern on lower priced stocks.

 

I also discuss an earnings eruption trade from earlier in the week on LZB. The earnings eruption trade continues to be the most reliable short-term trading setup for us in the current market with big upside.

 

 

 

 

 

Quick note: some big swing trades are setting up on top growth stocks after this latest tech pullback.

 

One just featured in the Daily Alert could easily soar 20% or more next week. We are currently offering a special to see this huge opportunity with not triple digit but over 1,000% earnings growth in a recent quarter.

 

Even though its on special, you still get my 10 day, no questions asked guarantee.

 

 

My List of Stocks with Rapidly Improving Fundamentals Poised to Move This Week

 

 

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