Wednesday, December 2, 2015
Three Stocks Ready For An Extended Move Higher
I'm a big fan of bases, the longer the base the better. The base is a term that technical analysts uses to define a stock that has been trading sideways for a while. I'm always intrigued by bases because a prolonged period of contraction typically leads to an extended period of expansion, and the longer the base, the better it is. What happens in the base that is being formed after a big decline in the stock is that the buyers and sellers find equilibrium, the sellers, for the most part, are done selling and or the buyers are taking in all the supply. These new stockholders apparently believe that greener pastures await the stock. More importantly, what you see right before the stock exits its base to the upside is a series of higher lows. $BCEI, $TRUE, $DANG, have all exhibited a series of higher lows. These stocks are to be looked at positively as long as they stay above their bases that are well defined.