The indexes made new highs again yesterday. However that doesn't mean we blindly go out and buy stocks. The reason why is because many leading stocks look like this:
As you can see, this issue is well extended from any safe buy point.
In a strong uptrending market, the name of the game is to "Let Them Come To You" in the form of looking for stocks that have pulled back off of their highs to an area of support. And when looking at charts, you should be asking yourself, "What Do I Need To See To Take A Trade?"
Last week, we featured ICE which had all of the elements we look for to take a trade on the longside.
Notice the difference been this issue and RINO? Here the stock has pulled back off of recent highs as shown by the pink line. The red line is support. The full stohcastics were in oversold territory. A break above the pink line triggers a long side trade. And wow, did it get up and go.
So what do we see out there on the horizon? Well FUQI has our attention.
As you can see, it has pulled back off of its highs. The red line represents support (or your stop loss level) and the pink line represents the Pullback Off Highs pattern. The full stohcastics are in oversold territory. All you need now is a break above the pink line to take a trade on the long side.
This is how to buy stocks in an uptrending market. Don't chase buses, instead let stocks come to you.
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