Replies to post #17249 on Marketgems Earnings Trader- Trading Strong or Weak (MKTGEMS)

[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.

[jenna]

RX, LAVA and important chart strategy. RX was on the Friday "watch list" (no charts though) Notice how it did move move up and remained at support into the close.A DOJI or other NRB (narrow range bar) after one or two bullish WRB is the "pause that refreshes for small consolidation hence the NRB" before the final breakout. LAVA is in the SAME POSITION here after 3 days of consolidating near resistance at 21.40 it should break out early this week. CTXS is a good example of the AFTER situation when the 3 narrow range bars (NRB's) finally broke out to upside on 8/27 and now we are in yet another "pause that refreshes" until CTXS takes out 21.50 to 22.

The NRB pattern was a very important doji near resistance of 19.50. A doji, spinning top or just a regular NRB at an important resistance level will soon break to upside. After 3 attempts to break this 'mini consolidation' RX broke to upside. This stock is representative of much of our chart patterns this month. A way to get on top of these patterns is to start EARLY usually in front of earnings and of course AFTER earnings if the reports are good (OTEX, ADSK, NWRE, TIVO, NSCN, MRVL, etc)

Before the next season we will start from 10 to 14 days before the actual reports to get this "upside". If the stock does well we either have our strangle play or for conservative players we might wait for the morning reversal play and possible swing play that will result.