There’s a simple market move that shows up again and again in both blue-chip giants and tiny penny stocks.
Most traders miss it because they’re too busy chasing hype on day one…
But if you know what to look for, it can hand you some of the cleanest trades of your career.
It’s a lot like my Monday Setup… Reliable, proven, and delivers huge wins to boot!
Let me explain…
Every Monday, the market kicks back into gear after a weekend of rest… And that reset creates a unique opportunity!
As the first session of the week gets started, there’s a specific pattern we look for, one that appears again and again with uncanny consistency.
And it has delivered some incredible wins!
Look what happened this past Monday…
HCW Biologics (NASDAQ: HCWB) announced its development of a groundbreaking treatment for certain types of cancers… And the stock took off, gaining 113%*!
These are the kinds of morning spikes we hunt for every Monday!
Now I want to teach you how to spot them for yourself!
Watch the video below for the full trade breakdown and strategy tutorial for my Monday Setup.
Besides the Monday Setup, this other pattern can completely change how you approach the market.
It did for me…
Table of Contents
The Power of the Weak Open Red-to-Green Pattern
Today I want to break down one of my favorite patterns, the weak open red-to-green move.
It’s powerful because you can use it on all kinds of stocks:
- High-quality mid- and large-caps, or what I call “real stocks” (think NVIDIA, Apple, or earnings winners in hot sectors)
- Speculative small-caps and penny stocks on day two continuation plays
Why It Works for Mid- and Large-Cap Stocks
Imagine a strong earnings winner, maybe a $15–$20 stock, that trends higher all day after a big catalyst (like a government contract or major partnership).
By the close, it’s up 10–20%…
As a trader, you’re tempted to buy, but you hesitate because you don’t want to chase the top. That’s smart.
Here’s where the weak open red-to-green pattern comes in.
What to Look For:
- A strong catalyst (real earnings, contracts, major partnerships, not vague penny stock PR hype).
- A clean uptrend through the prior session with no big dips.
- A weak open the next day… To be clear, this is not a crash, just a soft gap down relative to the previous day’s close.
When that stock opens red and then flips green on day two, it triggers:
- Buyers who missed the move the day before.
- Traders adding to existing positions.
- Shorts getting squeezed and covering when their stops get hit.
That shift in momentum can fuel a continuation move.
How to Trade It:
- Entry: As the stock crosses back above the previous day’s close.
- Stop: At the morning consolidation area (often 5–10% below).
- Exit: Use a trailing stop. With mid- and large-caps, you can swing trade these for days, weeks, or even months if they keep trending higher.
Why It Works for Small-Cap & Penny Stocks
Now let’s flip to low-priced momentum names.
Picture a penny stock that explodes 200% on day one, then fades into the close…
The next morning, it gaps down hard, which is typical.
At first glance, it looks dead. But if heavy volume comes in around 9:45 a.m. and it pushes green on the day, that’s your entry.
Why It Works:
- Shorts pile in on the gap down, assuming the move is over.
- When the stock flips green, shorts panic and cover.
- Buyers who missed the run the previous day jump in.
This adds fuel to the upward momentum and creates powerful continuation moves that can retest day-one highs or even break out further.
How to Trade It:
- Entry: As the stock flips green on day two.
- Stop: Decide upfront how much you’re willing to lose ($100, $200, etc.), and size your position accordingly. Failed red-to-greens fall apart quickly, so cut losses fast.
- Upside: Huge. Risking 10 cents per share can sometimes net $1, $2, or more when the squeeze is on.
My Final Thoughts…
The weak open red-to-green is one of my absolute favorite patterns because it:
- Works on both high-quality mid/large caps and speculative small caps.
- Gives you clear risk levels and entries.
- Sets up some of the best continuation trades you’ll find.
And best of all, if you’re a part-time trader, the weak open red-to-green gives you time to plan ahead.
You see the stock the night before and you note the catalyst, volume, and the trend. Then, the next morning, you wait to see if it sets up…
If it doesn’t go green? You ignore it.
And if it does? You’re ready to pounce.
If you’ve been struggling with chasing day-one spikes or missing the best movers, this pattern could be the solution.
Plan the night before, wait for the weak open, and be ready for the flip…
And flip from losing… to winning!
Have a great weekend, everyone. See you back here on Monday.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
These stocks are risky to trade but can reward big.
Did you miss the big event on Wednesday?
When the market heats up again after Labor Day, you’ll want to know how to trade like this.