Here’s Some Solid Support For A Reversal Trade
After two or three days of consolidating,
you’re very likely to find some recent high flyers testing key support levels. If
you find one that also has a better “story” than most, and a “marvel'”ous pattern
to confirm entry, it might just be time to consider a reversal trade.
Marvell Technology
(
MRVL |
Quote |
Chart |
News |
PowerRating) happened to
fit the bill in today’s trade. I’ll admit it, I can be a “sucker” for a good
story, and Marvell’s substantial gap higher on the daily chart is a testament to
that fact. But, more importantly I need to see a decent technical picture
shaping up when I enter a stock. Since I usually like to zone in on potential
reversals into technical supports, MRVL was fast becoming a trade candidate. In
the first 30 minutes of trade, the stock was alerted to in the TM
chat room as it was initially testing daily supports.
Less than an hour later, the stock showed signs of
stabilizing at daily supports when it put in a double 3-point low with some nice
diverging action in the stochastics as well. All things considered, Marvell
Technologies was giving us a marvelous opportunity to try on a reversal trade
with all the ingredients in place.