I just saw this today – happened to be looking at some 30-day charts and ran across MAMA. Do you see what I see – that’s right a kiss of the 4 EMA after that huge run up earlier this month – then it doubled off that. If I keep missing these jewels and taking trades in dogs like WFC I’m going to trade in my kit for a tin pan. I’d be better off panning some cold creek somewhere looking for gold.
Anyway, congrats to all who saw this classic set-up which goes like this –
1. A brisk rise in price in either one or several days,
2. A pull back to the nearest EMA (or MA),
3. Kiss the EMA and then rebound, or,
3a. Drop through that EMA to the next and then rebound, or,
3b. Drop through that EMA to the next and then rebound.
One way or another it is either going to rebound or keep going down. When you see the set-up developing you should put the stock on your watch list and return to it at least once a day towards the close watching for the rebound. Note that I said “you” – I obviously am immune to these rules. What’s worse I even played this guy the other day for a day trade and didn’t bother to bring up a longer-term chart. What a Duma (the middle b and the trailing s’s are silent).
Also might review this chart in the context of the previous post - When Should I Enter a Trend.