We’ve seen a great rally in the past two days, today I would say is a buying opportunity, for several reasons.
- We see selloff, and lower stock prices
- Stocks dipped down, but we are still in an uptrend, so there is a good chance they will continue to go up. Buy the dip is a good strategy, even if the stock goes down more, it’ll still go up over time.
- There is less fear in the market
- Earnings season is over
- No major news on the horizon
As always look at the overall trend, make sure the stock shows good uptrend over at least a year period, if the stock is in a downtrend and then you see it’s going up this is called a bull-trap, a bearish reversal. It will go up a bit, and then crash back down. Make sure stock price is above previous level of resistance, in some cases wait until the stock goes through several resistance levels and shows good indication of an uptrend.
There is another thing that traders are doing, is over analyzing the trade and missing the entry window. For example, trying to find the bottom and then seeing the stock jump over the two day period, like a lot of stocks did on November 6 and 7. Now they are down a bit and then will pull back up on Monday.
Enjoy your trades!