Marketgems Earnings Trader- Trading Strong or Weak Earnings Growth

[jenna]

RX and important chart strategy as a reversal turned into a breakout play. RX was on the Friday "watch list" (no charts though) Notice how it did move move up and remained at support into the close. This is a CONTINUATION play based on the WRB formed on 8/28 following the REVERSAL pattern from 8/26 doji)
A second WRB (wide range bar) formed on Thursday but RX "paused" a bit at the resistance before finally breaking through to the upside into what is now a lovely BREAKOUT PLAY. Many of our other stocks did the same (LAVA, OSTK, IDCC, NWRE, NSCN etc.)


The pattern was a very important doji near resistance of 19.50. It took 3 sessions (usually we give it up to 3 sessions) for the resistance to be penetrated to the upside and today's break on a WRB is typical of these kinds of setups. On the flip side usually when stocks hit the support level about 3 times they tend to drop like a rock but in this situation 99% of our trades are on the long side and have been so since August 13.