How A Potential Reversal Can Trigger
I’d rather be a little early in posting
a potential reversal alert than being ‘Johnny come lately.‘ Admittedly, I’ll
write up what I consider to be an interesting situation before the actual
trigger. Sometimes the stock keeps going, and the alert becomes what I like to
call a ‘no harm, no foul’ call. I might end up looking a little foolish on those
stocks that keep moving in the opposite direction of my ‘early look.’ But, when
they work, it makes the anticipation all worthwhile. If we’re given a little
extra support before the trigger, all the more reason to hop on board for what
should be another good ride upstream.
10:28:09
Intraday
Setup Alert
Digital River (DRIV)
is setting up as a potential reversal. Today’s lows are at the 20-Day EMA,
and thru the prior weekly breakout point by approximately 4%. Triggers might be
considered above the high of the current inside bar based on the 5-Minute chart
action, with the use of a money stop for protective measure. At the moment, an
inside bar is being formed after a double test of 21.40.
Sometimes with the early alert, by the time that
the stock actually triggers, the pattern has built itself into something a little
bit sturdier. If everything is still in
place, now we have one more reason to take the trade. And the last time I
checked, three reasons are still better than two.