1) Do you ever wonder why some stocks gap up and go higher, while other stocks gap up and go lower?
2) Do you ever wonder why some stocks finish at their high of day, then continue higher the next day, while others sell off?
3) Do you ever wonder where to buy a pullback of a stock in a strong uptrend, with a great risk to reward ratio?
When you subscribe to the Daily Premarket Trade Sheet for $29.95 per month, these are just some of the things you will learn. The key is combining Elliott Wave Theory on the daily chart with intraday price action on the 5 minute chart. Click here to subscribe now.
Trade Sheet Example
Many stocks gap up every day. Some of these stocks continue higher while others sell off. How do you know which way to trade them? The answer is Elliott Wave Theory. The example below is a great gap up sell first long trade that was included on our daily premarket trade sheet.
On gap up sell first trades, wait a minimum of 20 minutes. If the stock sells off initially, the entry is above the first 5 minute bar high after 20 minutes of trading have completed ($27 on this stock). The stop is placed below the low of the day ($26.82 on this stock). Why go long instead of short? The answer is understanding what Elliott Wave this stock is currently in on the daily chart (see below).
The gap up in the stock results in a wave 3 that is 144% the length of wave 1. Typically wave 3′s go 162% the distance of wave 1, so this is an excellent long after the initial sell off. The stock still has room to the upside before correcting in a wave 4. The stock trades as high as $28.50 and closes at $28.27. If you would like to participate in similar trades like this, you can subscribe to the daily premarket price sheet.