Some momentum names like $YY $SFUN have been selling off for days now. When that happens as a trader, you always need to watch out for a bounce at some point, whether its on previous price or moving average support. Some time you will miss the initial bounce entry but there are ways to trade the second run after the first bounce. I will show you one of the way to play it.
SFUN former momentum name for six days now as it approached it’s 50 DMA, As you can see in the chart below it finally bounced off the 50 DMA today.
Now even if you missed the initial bounce off the 50 DMA,there are other ways to find entries. Let’s look at the intraday chart to see how the strategy played out.
As you can see 1st entry was morning sell off 50 DMA 48.30 area and i missed that.
Second entry came when after an initial bounce, stock pulled back to a higher low 48.70.Now this where i pay attention.This is the “Trading Zone” I want to see buyers shows up on this first pullback . Stock bounced again right away and back over VWAP .
Our long entry was 49.06 with stop below that higher low 48.70.
Stock gave another entry even if you missed the second entry. Third entry was on intraday base break at 49.35 area.
Stock made a high of 51.29. $2.23 gains from our initial entry.
YY another stock, same setup as SFUN
We will teach you more about this type of setup and many others in our upcoming trading bootcamp starting November 5th.Learn how to be profitable in any market and to grow a small account! We teach you everything from risk management to scanning to trading strategies. I also share my exclusive intraday trading strategies that produce big gains with minimal risks. The class is one of a kind. See why you should sign up for the course here and email me thenyctrader@gmail.com. if interested in signing up! You will also have access to a private community where you can ask questions, share charts and talk with the instructors about your trades.
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