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Strategies & Market Trends : Strictly Buy and Sell Set Ups -- Ignore unavailable to you. Want to Upgrade?

To: Rattle_Shot who wrote (5328)	9/6/2005 11:49:15 PM
From: chowder	Read Replies (1) \| Respond to of 13449

No Rick, RTK doesn't qualify for the 3-5 bar reversal. The very first part of the set up requires 3-5 "consecutive" down days. Here's the set up: -------------- 3-5 BAR REVERSALS ------------------ This strategy is one of the master keys to finding low risk entry points. If there were only one trading concept to use, the 3-5 bar drop would be it. THE SETUP: The 3-5 bar drop is comprised of 3 to 5 "consecutive" down bars. A down bar means today's closing price is lower than the prior bar's closing price. Today's closing price is below today's opening price. Today's open is at or near the high of today's price range and the current bar is at or near the low of today's price range. Strong performing stocks (those in an uptrend) tend to rebound sharply after experiencing 3 to 5 consecutive down days. The stronger stocks will rebound after 3 days, the moderate performing stocks after 4 or 5 days. Any decline that exceeds 5 consecutive down bars is signaling weakness. The 3-5 bars drop rid the stock of its weak hands creating a moderately oversold condition, which attracts new buyers and effectively drives up the supply. ------------------------------------------------------------- Once you have the set up, then you move to the trigger and entry techniques which can be found in this link for further review: Message 20766476 If you are looking to buy RTK, or to add to it, I see two potential set ups. The first would be for price to come down to the 20 day moving average, look for an entry in that price range and use a stop 6 to 12 cents below the 20 day moving average. The second set up, as it appears today, is to buy 6 to cents above today's high of the day and set a stop just below today's low of the day. Waiting to buy above today's high insures that today's gap closes. Gaps often serve as resistance and you would want to take this level of resistance out to insure a low risk, high probability trade. stockcharts.com[h,a]daclyiay[d20050606,20050906][pb50!b20!f][vc60][iut!Lah12,26,9!Lc20]&pref=G dabum