This is a decent stock to look for bearish plays to pair off with my bullish ones. Arguably, a stock like Walgreens (WBA) would be even better since it's in a very clear downtrend. However, when stocks are coming off the tops of bull runs, there aren't going to be many in perpetual downtrends. So, I'm looking for relative weakness using bearish A+ setups. Getting Tighter The second major adjustment I'll make is going to shorter timeframes. When markets start to fall, they tend to do it quickly. However, the bouncebacks are just as violent. So, rather than looking for A+ bullish setups on longer timeframes like the daily or weekly, I may start identifying setups on the 15-minute timeframe. If markets are going to sell off, then I want to do what I can to reduce the risk that my position goes with everything else. So, I'm going to look for relative strength. One of my favorite stocks right now is Applied Materials (AMAT). You can see on the daily chart above that despite the broader market weakness, this stock has held up quite well. However, the momentum has turned south as is evidenced by the light blue lines turning dark blue. But, if we drill down to a lower time frame, like the hourly, you'll see there was a squeeze where the momentum was bearish but turned positive right before the squeeze fired and the stock popped higher. This isn't a breakout trade where the stock is extending to new all-time highs. And that's not what I want to shoot for with all of them. Instead, I'm looking to find pockets of strength and bullishness within the broader market. A Pullback vs a Trend Change How do you know whether you're looking at a small pullback or a trend change? As anyone who's traded the market for a few years can tell you, this isn't an easy question to answer, but it's important you do, With markets signaling shift, the next few weeks are critical. Making the wrong decision can either leave you watching others scoop up the profits or turn your entire year upside down. That's why I'm inviting you to a full week of Daily Profits Live at NO CHARGE. All next week, from 9am-4pm, you get full access to my LIVE trading sessions for FREE so you can see how I'm analyzing the markets, selecting trades, and managing risk. Don't take on this market by yourself. I turned a $37,000 account into $2.7 million during markets that constantly changed. And - I've helped thousands of folks learn how to navigate and trade using easy-to-follow setups. Now is your chance to see how its done. No credit card required. Click Here to Reserve Your FREE Seat for a Full Week of Trading and Education. - Nate Bear, Lead Technical Tactician |
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