OTCQX:PALAF - Post by User
Comment by
PUNJABIon Apr 17, 2013 12:19pm
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Post# 21265764
RE: The Question
RE: The Question The post got long & missed about double bottom or reversal. They are different trades. Both can fail. You can have a break below 52 week lows if there is a market melt down or the markets slide continues for a while. At times critical support point is temporary broken & triggers some selling followed by exhaustion of sellers & bounce. I like new low trades because of dead cat & oversold bounces. Unless the company is done you are not going to get too many constant new lows.
Quite a few times I have seen stocks break 200 ma & then after short time the reversal begins which means that 200 ma was dip & not breach in true sense & buying time. You have to assess lot of factors & make a call if it is wrong then have a plan to deal with.
With reversal quite a few times you would have a dead cat oversold bounce. some of the double bottom / support traders might be getting out at the bounce when bargain hunters come in. You can be caught chasing the stock if you are not fast enough to get out. If the reversal is based on rebound of U308 then it is totally different.
I trade both. I am more of a pullback trader & like declining or range bond stocks. I find new 52 week low trades work better for me than trying to figure out reversal. Hate to chase stocks. If I am trading a reversal I would pull the trigger much faster when I see any weakness in momentum. I follow fast stochastic which has a tendency of generating quite a few false signals.