Saturday, March 19, 2011

Example of Daily Bouncer (small cap stock)

Here is an example of a bouncer on the daily stock chart. YRCW fell from $2.43 on March 14th to a low of $1.19 on March 17th. As you can see, the candlestick on March 17th formed a nice long shadow with high volume which showed there was potential for a bounce play here. The potential for a nice play was realized with this stock, though it definitely was a risky play. The high of the day on the 17th was $1.40, so $1.41 would seem to be a good buy-in price. The initial pull-back after reaching $1.45 probably would have scared me away from this stock for a 1-2% gain, but if you had the guts to hold through that you could have realized as much as a 19% gain in about 2.5 hours. And if you really had guts to hold through the dip after that you could have realized a 37% gain. While it is unrealistic to expect selling right at the top, this does show the potential of the daily bouncer, and bouncers overall.

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