 |
More Education = Higher Trading Confidence, have fun reading our knowledge base! | Message Boards |
 |
Live! Chat | |
| Club Pulse |
Under
our Stock Leads section on OTC BB Pulse, all stocks
there are dedicated to the bounce plays in some way or another. Especially
the stocks under the Pulsing Stocks
section, there are big movers, which can go both ways during the trading
day.The word bounce is pretty much self explanatory. However there are different types of bounce plays, and we will try to explain the bounce plays terminology we use here at OTC BB Pulse.
We do have some advance methods to time and spot these bounce plays. However, we will only do a simple overview and introduction here.
Type
1: Quick V BounceThis type of bounce play usually happens when a stock is sitting at the overbought region.
As indicated in the letter 'V', the stock will fall off quick then reaches a region that the demand becomes greater than the supply, or short-term oversold. The stock will then make a quick bounce, usually it cannot reach the sold off price level after the bounce.
Most likely, we look for a 10% return in this type of play. The basic enter and exit strategy should mainly rely on the L2, and should never be based on the the expected percentage return.
Type
2: 2nd Leg BounceAfter the Quick V bounce, a stock usually consolidates at an area. Here is when we should expect a 2nd leg bounce, as the development of the company may unfold more information to trigger the bounce. Key areas for technical bounces are the EMA lines and Bollinger Bands.
If there is no more development, it will most likely to drop more from the consolidation area.
Type 3: Bottomed Out Bounce
Stocks that we think they are oversold and due for a bounce. Quite simple.