$LEDS Trade Review – Trading Bottom Bounces

Here is a trade review of $LEDS, demonstrating my bottom bounce setup.  You will see me play it often.  A falling stock will eventually run out of sellers, at which point it will flatten out and the buyers and sellers will reach a state of equilibrium.  At this time, the value buyers also start sniffing around, sensing that the selling was overkill.  Now that the heavy selling is over, even a hint of buying pressure can reverse the stock, giving it a major pop and even potentially a long term trend reversal.

That’s what we did with $LEDS.  This was a stock I had my eye on for sometime; once it had a few days of basing action with its short term moving averages converging on the top of it, that’s when I get the signal that it may squeeze.

  • My entry was $2.88
  • Out 1/2 at $3.08
  • Out last 1/2 at $3.21

I give myself a B on this trade. The entry was timed perfectly to the penny, but I broke a few rules and sold too early. I made an assumption that the stock went up too far to fast, instead of letting it develop. So I ended up leaving a potential 20 cents on the table.

Want to become a bottom bounce master? Email me at kunal@bullsonwallstreet.com!

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