Fake Outs And Shake Outs
In market environments such as this, fake-out moves abound. However, if you
know what to look for and are not afraid to re-enter, you can often find
yourself on the right side of a trade while everyone else is sitting on their
hands.
12:57:09
VeriSign (VRSN)
is trading in a Trend Pivot Pullback from its recent low. VRSN is trading
down 3.15 to 39.07 and is carrying a 3-month
relative strength ranking of 53 from TradingMarkets.com.
In the Trend Pivot Pullback (a pattern discovered by Dave Landry) a stock
will make a one-day fake-out against the trend before reversing, shaking out the
"weak hands" who exit the position. Traders can then re-enter when the
stock trades under the low of the fake-out day.
Don’t be afraid of fake-outs and shake-outs. They just may be
tipping you off to a potential winner.
Until tomorrow,
Duke