Courtesy of All About Trends
YNDX and PRAA show the power of knowing the best technical pattern for trading in uptrending markets: the Pullback Off Highs pattern.
Rather than go straight up, stocks will often do the bunny hop dance — two steps forward, one step back. Those one steps back to areas of support such as lateral support, the 50-day moving average, or an upward trend line, offer you great opportunities for buying leading stocks at lower risk.
YNDX and PRAA are good recent illustrations.
Both stocks are in overall uptrends, above the 50-day moving average, and had pulled back areas of support as shown by the blue lines. The buy point was a break above the pink consolidation line. Buying there was your chance to enjoy the ride as both stocks may be beginning another two steps forward move to retest prior highs.
We already locked in our gains! Not bad for 2 days worth of work.
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