Patterns aren’t a one-size-fits-all application…
You can’t look at the daily chart and expect to see the same patterns as you can on an intraday chart — you must know which patterns to look for and when to use them…
Even on the intra-day chart or multi-day chart, there are patterns to look for in the morning and the afternoon.
How do you know which patterns to look for and when? I’ll tell you today…
These patterns repeat themselves in specific timeframes. Know which one to look for this morning whether you’re trading a day-one spiker or a stock that’s been running for multiple days.
The knowledge you gain here won’t just make you a better trader —it will give you the keys to unlock your future.
Learn all my patterns in my ebook — get it free when you join StocksToTrade Advisory.
Mastering Multi-Day and Day-One Patterns
Some patterns apply to multi-day runners and some apply to day-one runners.
Knowing which ones to apply and when can be the key to unlocking profitable opportunities.
So let’s dive into my top pattern for those multi-day runners that put in lots of green candles on the daily chart. These can be penny stocks or real stocks suitable for swing trading.
If you’re looking for an entry — this is one of my favorites….
A Pattern For Multi-Day Runners
Once a stock starts forming an uptrend for multiple days, it can create FOMO in a lot of traders who might’ve missed the run up.
So when it opens red (below the previous day’s closing price) they look at it as a dip buy opportunity…
On the other hand, short sellers who have been watching the stock put in multiple green days think the move is over. So they start shorting it.
When the stock starts to find support due to the dip buyers holding it up … It can cause the stock to go green (crossing the previous day’s close), that’s the short sellers’ sign to get out.
And more long traders enter looking to ride more upside.
That’s the weak open red-to-green pattern. And It’s all about spotting those quality stocks with multi-day momentum.
Root, Inc. (NASDAQ: ROOT) is a good example of a multi-day runner that has had multiple red-to-green moves…
Most notably after having a big red day that sucked in short sellers — since then it continued to run.
ROOT chart: 6-month, daily candle — courtesy of StocksToTrade.com
Day One Runners: Two Patterns to Nail and Bail
Now, let’s talk about day one spikers.
These are stocks that are running premarket on a fresh press release. They have beaten down daily charts but have a history of running in the past.
The first pattern I like to look for is a morning dip and rip. It’s designed for the “worst stocks in the world.”
The dip and rip pattern occurs when the big premarket runner pulls back at the open and lures in short sellers who think the stock will fail…
But then the stock finds support … But we don’t buy at the lows and try to guess the bottom…
Wait for the stock to show strength…
The secret to this trade is understanding supply and demand imbalances.
When it breaks the premarket high, that’s the entry. It’s where everyone’s a buyer — like a feeding frenzy.
TUP chart: one-day, 5-minute candle — courtesy of StocksToTrade.com
Shorts scramble to cover and breakout buyers jump in to seize the opportunity.
It’s a whirlwind of activity that can lead to big profits.
Once a stock has a morning dip and rip and you’ve been in and out for a gain, it’s time to watch for the next pattern…
If the stock holds up into the afternoon and holds or reclaims VWAP and breaks the morning high — that’s an entry.
INBS chart: one-day, 5-minute candle — courtesy of StocksToTrade.com
Then you can ride the short squeeze momentum into the close.
Remember with any pattern to have a risk management strategy and appropriate expectations for your trade.
It starts with being prepared.
Join me for Pre-Market Prep sessions, where I break down these patterns and trade ideas in real-time.
Whether it’s the weak open red to green or the dip and rip, understanding these patterns is like having a playbook for trading success.
Sure, not every play will be a winner, but when they do work, your winners should outweigh your losses.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade