Shake, Shake, Shake…
Common patterns that exhibit shake-out moves are often good opportunities to
capitalize on moves that other traders are scared of.
11:55:00
DR Horton (DHI)
is pulling back to the 20-day moving average. The stock is is currently down
0.87 to 39.82 and carries a
3-month relative strength rank of 92 with an uptrending ADX of 42 from
TradingMarkets.com.
On Monday, DHI was profiled as a nice pullback to the 20-day
moving average, a good spot to look for a pivot back in the direction of the
underlying trend. Today, however, the stock does not perform as anticipated.
This is good example of why a professional trader waits for a
trigger (follow through) before entering a position. The stock sold off on the
open until rebounding around 35.60. By waiting, you avoid a a possible 4-point
loss, and the “weak hands” get shaken out, often clearing the way for the stock
to head higher.
Until tomorrow,