Yesterday morning was another blood bath in the markets as investors ran for cover from the Fed’s rate increase.
If you listen to CNBC they’re basically telling you the world is ending and you should head to your bunker.
But not in the SteadyTrade Team…
Why?
Because there are small-cap stocks like Spero Therapeutics, Inc. (NASDAQ: SPRO) gaining 250%+ while the markets are in turmoil.
And today I’ll show you which pattern it followed, how you could’ve received my trade idea, and what made SPRO special even before the opening bell…
Unlike SOBR Safe, Inc. (NASDAQ: SOBR), this time it wasn’t about the news…
The Pattern
Since pattern recognition and knowing which ones repeat is crucial to trading … Let’s start with the pattern that sent SPRO up 41% from an ideal entry.
SPRO followed the dip and rip pattern. Where a stock that’s a big premarket gainer dips at the open, then reverses and rips through the premarket highs.
Your entry is where it breaks above the high. And you can use VWAP, the day’s low, or in this case, the premarket support as your risk…
SPRO chart: 1-day, 1-minute candle — courtesy of StocksToTrade.com
With SPRO the dip and rip even happened after 9:45 a.m. — which is ideal. Because that gives the stock more time to get loaded up with shorts.
And when they get squeezed when the stock climbs over the high of the day — that’s when you can see explosive moves.
Now if you’re new and didn’t recognize SPRO as a potential trade … Or if you thought it was up to much in premarket when it was up 140%+…
You didn’t have to miss it…
The Alert
You could’ve gotten my entire trade idea sent to your inbox as a subscriber to Daily Market Profits alerts.
I send you my number one pick every morning in premarket … You get all of Oracle’s picks and signal prices for the day … Plus, I go live at noon to give subscribers my number one afternoon trade idea — in real time.
That’s a heck of a value, right?
If you’re struggling to make consistent trade plans — click here to learn more about it.
And now here’s the number one reason SPRO became my number one watch … Look for this in the next big runner…
The Volume
I talked about this earlier this week as one of the three most important things to look for before you trade…
Float rotation.
Yesterday, during my premarket SteadyTrade Team webinar, SPRO had already traded 40 million shares. That’s 1.5 times float rotation.
I don’t like to use absolutes like always or never when it comes to trading…
But when I see 40 million shares traded half an hour before the market open — 99% of the time it will be one of my two top watches.
Because unusual volume creates unusual moves.
So when you’re looking for your number one potential stock to watch today and it’s moving on news — check the volume.
Float rotation means new buyers are coming in, willing to pay any price. And that’s what drives prices higher.
Combine that high volume stock with a pattern and plan then — BOOM — you’ve got yourself a good trade.
Have a great day everyone!
Tim Bohen
Lead Trainer, StocksToTrade