Stalking Two Setup Trades
When I'm looking to enter a stock on a pullback, one of the first things I look at is the prior corrective swings within the trend. Since we are looking at a pattern of higher highs and higher lows, which is considered an uptrend, I am looking for the prior corrective declines within the uptrend. Note that on the first chart of Expedia (EXPE) below, I have labeled a few of these prior declines. You can see swings between $7.09-$9.58. I have projected 100% of these prior swings from the most recent high made on Feb. 5, 2013.Expedia (EXPE) -- Daily 1 Source: Dynamic Trader View Chart » View in New Window »
These measured moves or "symmetry" projections help identify areas where we can look for possible support, since many corrective swings can be similar. Besides running the projections, I also run all possible Fibonacci retracements and extensions and then see where they overlap. A zone that has quite a few overlapping price relationships indicates a key support decision. I see two standout zones at this point on the daily chart. Let's take a closer look at these on the second chart below....374 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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