Multi Day Setup - Stock Symbol FEED

This is a recent multi day setup that occurred with the stock symbol FEED. It shows a nice clear pattern that often occurs and can be used for future profitable trades if done correctly.

Using a setup like this that occurs over several days is one strategy to use which can help provide good entry points for patient traders.

What I mean by that is rather than looking at intraday charts only, for quick scalping type trades or even two day charts.

Using a multi day setup can still provide good scalping oppotunities (I know) for those who still prefer quick trades while increasing the odds of producing profitable results.

Looking at the first chart below only (sorry for the blurry chart this time), you can see that prices appeared to have hit a resistance level between $5.00-$5.07 early in the session.

Multi Day Setup Breakout

Once prices broke through the $5.07 level around 10:12-10:15 a.m., volume began to pick up and prices continued nicely higher. But how can we find trading opportunities like this in advance?

One way is by charting stocks on your watch list over a multi day time frame. I like to use 10 day charts because I find it easier to catch potential multi day setups, but 5 day charts work as well. By using 10 day charts, you are allowing setups to form over a longer timeframe.

I feel it's sort of like when I exit a trade only to see it move in the direction I though right after I got out. Has that ever happened to you? I'm sure it has, it happens to all of us.

Anyway, like the stocks that keep going when I close my position, taking a step back further in a timeframe respect, in both cases, allows the stock to reveal more of what's actually going on.

Let's look at a a chart of FEED below over a multi day timeframe (sorry for the blurry chart this time). I am showing a 5 day chart (I had used a 10 day chart when this particular setup caught my eye, but I didn't save the chart, only a 5 day chart).

The 5 day chart below works just as well for the purpose of seeing the breakout patterns over a multi day period. Take a look:

Multi Day Setup - Feed

You can see that on the third day of the chart, prices broke out above $4.65 with huge volume and closed at/near the highs of the day. Even though the first day may have been hard to catch prior to the move, this days move itself would have showed up in various places to catch to put on your watch list.

Having prices close at/near the highs of the day is the first good sign of strength. Regardless of this though, after a large move on heavy volume, this type of movement could be a potential short or long trade from here.

The next day after the initial breakout, prices pulled back, but only part of the prior days move, and finished again, towards the highs of the day.

The 2nd day after the initial breakout, prices fluctuated in a tight range, re-testing the highs (the upper resistance level) of the two previous days. Notice in the afternoon, prices stayed right at about $5.05 for the entire afternoon. No sign of weakness here.

The last day on the chart, of which I only have shown the first hour of trading, shows the second breakout. Having this particular stock on your watch list from the previous breakout would have allowed you to see this potential breakout move unfolding.

Not only did each day after the initial breakout show signs of continued strength, they formed an Ascending Triangle as well. For those of you who have read my pages on an Ascending Triangle, you know that prices usually breakout with increased volume, either to the upside or downside, at the end of the pattern.

In this case, the signs of strength combined with the Ascending Triangle pattern, along with a few other things that occurred, would have allowed someone to forecast this breakout and have a nice profitable short term trade.

This is another example of using a multi day setup to wait for good entry points to produce profitable trades. As always, I would suggest to practice using a watch list and multi day charts to see if this will help your own trading style.

Return From "Multi Day Setup" To "Intraday Trading Strategies"

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