Oxford Resource Partners, LP (OXF)

[dmlabuda]

Yes, that is a strong possibility. In a bear market however, there are a lot of false double bottoms along the way. What makes this one believable is the high volume. and the candle shadow that reflects a rally of the lows. I would not expect a huge rally and new highs but if I were long this stock (I'm not) I would add to my position to cost average down. Let me explain. I always enter into a trade using a money management strategy that works like this. If I have $10,000 in available capitol in my account, I only invest 20% or $2,000. If the price goes down and I still like the trade or a possible double bottom or other, better, bottom scenario unfolds, then I double up by adding another $2,000 to cost average down. Assuming the market finds support and the trade now looks like it's in my favor as a high probability of success, I will add another $2,000. I may or may not add the other $4,000 later at my discretion. When the market becomes overbought, I take my profit from that trade and set it aside as a possible reinvestment following a market correction. Now I have a free trade, if I chose to play the next leg up. I never add to a losing position without a very good reason to do so. A confirmed double bottom would be a good reason.