Flipping The Script:
Just as it is very hazardous to catch falling knives on the way down it works similarly with the upside. When stocks are getting crushed there is no reason at all to get in the way until a technical catalyst presents itself with a bullish candlestick for instance. And conversely, when names are going parabolic to the upside let them run until a bearish candlestick occurs. Of course, it is not a panacea for success but it gives good risk/reward to play against. Below could be a good example with the chart of AMD. This name rocketed upward from roughly 80-130 without catching its breath in May. Tuesday produced a bearish dark cloud cover candle which should have had at least some shaving of a core position. Wednesday followed through to the downside dropping 6%. And no need to step in front of the selling here until it perhaps fills in the gap from the 5/24 session. It is still well above a 100.04 double bottom with handle pivot and long-term holders with a good basis (owning before May) should let this overall recent bullish development play out. The stock’s overall behavior deserves it.