Greetings.
The basic rules for playing these cats, known as PGDCEBs (Post-Gap Deat Cat Exhaustion Bottoms) are as follows:
A stock gaps down, from close to open, 30% or more, usually on volume five to 30 times greater than average. Over the next 3 weeks (15 trading days) a down trend often results as more holders steadily throw in the towel and eat their loss or the post-gap momentum players take gains/say: "What am I doing in this piece of ..."
The extreme oversold condition reaches a point of opportunity on a day when a NEW LOW is made on GREATER VOLUME than each of at least the previous 3 days ... an exhaustion bottom. On that day, the BID must close OFF the low, preferably by TWO TICKS or more.
The ensuing reaction produces an average gain of 28%. A stop-loss of just 2 ticks below the signal day low is HIGHLY recommended. It must be stressed that these are extremely perilous situations, as one is literally working without a net.
Many PGDCEBs return to new lows after the upside reaction and signal again. These stocks develop a "signal history" which can be very helpful in assessing the potential for any future trade based on the signal. A cat with a poor signal history should generally be avoided.
A portfolio of some current cats:
techstocks.com
techstocks.com
techstocks.com
techstocks.com
techstocks.com
Currently playable (signaled yesterday) is CNDR. It MUST be sold, however, if it goes to 2 1/6 - 2 1/8, depending on your pain threshold.
Current new lows among cats are: PHXX and SBUX.
Good luck, happy trades, be aware that those who post Private Messages are regarded as coward lurkers, held in the deepest contempt (i.e.: your confusion is doubtless shared by others out there, so don't be afraid to make mistakes/ask stupid questions) and ...
Keep those cats and litters coming!
Ivan |
