Here’s A Reversal Play You See Every Day
When you see a strong
move in either direction, you know that a contra move is not far
behind. Stocks just don’t rally or fall rapidly without a reaction move. But
when that contra move is over, we often reverse right back in the direction of
the main trend. That said, there are strong
moves in the market every day on which to play these contra trends. For example,
TradersWire members got
this alert this morning:
10:05:50
Intraday
Setup Alert
Michael‘s
Stores (MIK)
appears to be resuming its downtrend after staging a counter-trend rally.
The stock is a member of TM’s Trading
Where the Action Is, and is down 0.73 at 32.50.
Three wide bars down on the open, and the
counter-trend rally happens. And when that rally stalls out, we go right back to
the downtrend for a .50 gain in 20 minutes. When the contra move comes at a Fib level, moving average, or swing point, it
adds even more strength to the setup.
Have a great weekend!
Brice