mxp937

Long First & Then Short

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LSE:SXX   None
We look at candlestick patterns and volume to determine when to buy / sell. On 6 September 2018 at 8am the share price drops by more than 25% on the basis of procurement and capital estimate news representing a potential awesome buying opportunity for the brave. A contrarian investor believes widespread pessimism about a stock can drive a price so low that it overstates the company's risks and understates its prospects for returning to profitability. Identifying and purchasing such distressed stocks, and selling them after the company recovers, can lead to above-average gains. Since the price moves up more than 5% in 15 minutes between 8:15am-8:30am, this is a superb buy entry point because there is a lot of volume behind the movement. In addition, the shooting star is confirmed a few hours later and we have a situation where this represents the trapped buyers who quickly realise they may have overpaid for the position as the price stops rising. When the second candle closes lower than the prior candle low, it indicates that every buyer on the shooting star candle is now underwater. The tension builds until the proverbial trap door opens. Greed turns into fear as liquidity vaporises, which in turn causes more panic selling.
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