This is called the "March of the Bulls", and also known as "Stair Stepping UP". This is a very bullish chart pattern, where it moves up a lot, pulls back a bit, and then moves up again over and over. The pattern somewhat resembles a stair case. You don't see this pattern very often, but when you recognize it happening it's usually a good idea to stay in the trade to see how far it will go.
It's a healthy way to make a Bull move that isn't too steep, and has periodic pullbacks which is good because no chart can go straight up without falling just as hard. See the example of the "Blast off, then Crash" pattern at the bottom of this post.
Being the unrepentant Scalper that I am, I probably would have bought and sold TSO three times today on this run and made less than if I had stayed in for five hours. For those of you looking for a way to stay in Day Trades for an hour or longer, this lesson is a good one for you...
SSO's five minute chart looks very similar to the one below, but the Indicators are a bit more erratic so I used a TSO chart to give a better picture of what I'm trying to explain here. SSO moved up three dollars in five hours, so either one would have been a great play for today.
The most important thing to watch is the CCI in this case. As long as the CCI keeps bouncing up off the zero line, you can stay in the trade. The second most important thing is Stochastics bouncing up off the 50 line. The second time Stochastics broke down towards the 50 line it broke below it just a bit which is kind of scary. But the CCI was in great shape at that time, so there was nothing to worry about. 1000 shares bought at $7.30 five hours later sold at $8.20 for a gain of ninety cents, or $900.00!
Here's a better look at the 5MA (white) and 15MA (red) without all of the other Technical Indicators.
I've changed their colors from my normal ones so that you can see them better. Can you see that the PPS never closed below the 15MA, and the 5MA never crossed down through the 15MA? Since neither happened there was no reason to Sell until just before the closing bell, because it was Friday and Day Traders never hold over the weekend or overnight.
An example of the "Blast off, and Crash" pattern. It's very unhealthy not to have numerous pullbacks during a strong rally, because when it starts falling there are no levels of support to help hold it up. It goes up vertically eighty cents without one red candlestick, and falls just as hard and fast as it went up:
Happy Trading,
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