Overshoot post trend-day, daytrader talk AAPL

  • Posted by
  • on April 23rd, 2012
We had written on stream and in our newsletter about AAPL 568 many times over last two weeks– it was a magnet and action point.
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This weekend we wrote “AAPL trend move down on Friday right to support, will likely bounce at some point on Monday, if it’s gap up from the open it’ll be the hardest to catch and we’d pass. However, a sell-off past 568 takes it into overshoot territory and we’ll be on look-out for a hammer candle extended from EMA to get long into a move back to underside of 50sma “
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It’s a great rule to remember – if a stock trends down to close at support it will either gap up next day against support, or sell off more but bounce back into original support. Either way, most of the time there’s a bounce that can be traded and if you’re looking for it beforehand, it’s not that hard to catch.
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Here is move away from EMA complete with hammer candle 560 for a move back to gap fill/ 50sma which was 568-570. Anything over that is icing.
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Overshoot can be difficult for some because there is no alert to buy into – the alert actually is the sell point. So $AAPL 568 is support, we expect overshoot and want to get in extended from EMA, hammer candle and with target a move back to 568. Even though the tough part can be finding the entry, they often have very high success rates.   It’s one of our more advanced strategies but it has one of the highest win rates of any type of trade we take.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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