Remember this? Now we buy!

Remember the blog post on why we use a stop loss? The direct link to that article is here. After the close last Thursday and Friday, Hook has increasing volume and price is accelerating and it appears it is in a trend reversal. Notice all the Red bars in the declining trend from it’s high? Now look to see the last two bars are green. When you get two green bars consecutive after a downtrend, this is a good sign of a trend reversal. If it is followed by a 8 day ma crossing over a 21 day ma, it is another sign. But most important and the thing that stands out the most, is price is rising and volume is increasing at the same exact time. The stock also bounced off support at $6.04 three times before it reversed. The RSI also jumped above 50  and the MACD appears to rolling back up.

If I were investing in Hook, and there is that possibility, Monday October 25th with follow through would be my first in this stock. If it opens up lower and falls though $6.74 then I would not buy this stock. So Monday if it opens and holds above $7.15 in the first 30 minutes, I might open a position then set my stop loss immediate at $6.74. If you buy this stock at $7.30 and it returns to the high of $9.94, that is a 36% increase, so you do not have to buy at the bottom to make money.

If all works perfectly, isn’t that a funny statement, then expect Hook to rise an slow at $9.94 it’s first overhead resist. Then if the fall back, add back theory holds true, then I would look for a top or slow down at $13.74. How did I come up with that last number? The last high and the fall from that high was $9.94. Then we had a low of $6.01. Subtract $6.01 from $9.94 then add it back into $9.94 and there you have it. This is the point when and if it blows through $9.94 that you would expect a slow down, consolidation, or pullback.

Last note, if you do buy this stock, make sure that the overall market is also heading up.