Multi Day Trade Setup JYHW

Another multi day setup using JYHW this time. This was a stock that I have had on my watchlist because of it's hype and increased volume lately.

Take a look at the chart below to see the various observations I pointed out as well as paying attention to the support and resistance levels:

Multi Day Trade Setup JYHW

After initially moving higher on this 10 day multi day trade setup chart from near $0.90 up to approx. $1.60 on January 6, 2010, prices began to pullback. On January 7th, prices moved much lower from the previous day, but buyers stepped in and propped the price right back up. There was no continued selling pressure on the early morning drop.

The next day, January 8th, prices re-tested the prior high near $1.60 and pulled back again. This time pulling back less than the previous day and closed near the highs of the day.

On January 11th, prices continued higher, and broke out to a new high on this chart just shy of $1.70 but that was about it. No follow through strength on the first breakout attempt to new highs.

After pulling back slightly over the next two days prices once again tested the recent high just shy of $1.70 but once again failing to breakout yet closing near the highs again.

On January 15th, prices re-tested once again and this time broke out higher to $1.80 and closed at the end of the day at a breakout high just above $1.80.

Now, prices have gone from near $0.90 to just over $1.80 in the 9 days shown on the chart. A potentially risky buy, or a potential short as it has doubled in such a quick time period.

Typically when a stock is being pumped by paid stock research companies (promotors), they will spread out their press releases and spam emails that they send out, to build upon the previous move. This morning, I received and email doing just that. It was an email stating how this stock is going to move higher for such and such a reason, blah, blah, blah.

Well, after breaking out to a new high and closing at the high of the day the previous trading day, this would be perfect timing to give the stock another boost, at least a potential boost anyway.

I started watching the stock early today on the 18th, and as you can see, it opened higher with no pullback, and then moved up over 10% within the first hour of trading.

This is another example of a multi day trade setup, using JYHW this time, that can be good to learn from by studying the patterns and breakouts that occurred over several days.

The risk to such multi day trade setups of course is that the stock is being pumped, which could wind up reversing hard at any time.

The same strategy can be used on higher priced stocks while looking for the same multi day trade setups and potential breakouts. Always be sure to have some type of stop loss in place to protect yourself from potential losses. If you see that you are wrong, think hard about closing your position and getting out, preferably having this thought out before you even enter the trade in the first place.

Read the follow up article I wrote to see what happened the next day after the above chart: Pump and Dump JYHW?.

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

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