Explosive Bottoming Patterns

Explosive Bottoming Patterns

This technical setup is the best performing short-term holding strategy, even if earnings season is over. It can be used for hold times between 1 and 8 days.  This is especially true for stocks that are around their 200-day moving average.

Stocks moved between 10% and 15% last week within two days of following this pattern.  Recent back-tests indicate that stocks have a higher than 80% chance of succeeding within one week and a 1/2 with a tight 3.5% stop loss

This works because you have a great stock that has been oversold and has a strong trend. It is also 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 that exists between the technical entry point of the next level and the next level.  It is often a mistake to just buy an oversold stock.  It’s a trade that has high upside potential and has a high probability of success.