Actually very simple: Buy when the stock pulls back. The Logic is very simple: The stocks that are in an uptrend will always find buyers at lower levels. But the key question: How low and at what level?
The Charts help in answering that question. The key skill: Ability to read the charts and pick the right support area.
Let me share 2 examples:
Apple at 200 week moving average
Apple pulled back in 1H CY2016 and presented a great opportunity.
Support Level 1: May 03 2016
Why Apple stock can bounce from current levels...the stock is at solid support levels pic.twitter.com/8khPxXhRE6
— Deepak Singh (@smarket) May 3, 2016
Support Level 2: May 13 2016
Apple is at 200 week moving average NOW - The Utlimate Support level pic.twitter.com/c9ujiMkwiz
— Deepak Singh (@smarket) May 13, 2016
Just see how Apple stock has bounced from that level
This is how Buy the dips trade works
Disney at Horizontal Support Level
Disney pulled back and created a solid support base. It looked like a "Buy the dips" opportunity in September 2016
Disney has come down to very attractive BUY levels pic.twitter.com/Ah8oPxb1pA
— Deepak Singh (@smarket) September 27, 2016
Just see how Disney stock has bounced from that level
Many of you have asked me on how to read stocks on charts. Here's the Video book
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers