How to Enter a Core Long With Bullish Daily Setups
At Master Trader, we trade compelling setups using our objective approach on anything that moves, and which applies to any time frame.
Master Trader teaches many price patterns for trading stocks and options.
Using Bar-by-Bar Analysis, you will know what any price pattern signals — even one that can tell you to do nothing.
The Structure of the price pattern will speak to us about the relationship between buyers (demand) and sellers (supply) and the likelihood of reversals and trend continuation.
We are going to show you a trade we are long as a core trade, meaning holding period of weeks to months because of the large Price Void (lack of significant resistance) as explained on the monthly chart.
Below is a monthly chart of RPC, Inc. (RES):
The monthly has a Price Void to $10+ and the Breakout occurred after a two-year bullish consolidation.
Below is a daily chart of RPC, Inc. (RES):
On 1/26, we recommended buying a ½ lot of stock on the morning pullback to support after RES had a +Gap Breakout.
This is not a quality initial Breakout that we teach since it rallied from the lows to the highs, but because of the huge Price Void on the weekly and monthly charts, we wanted some long exposure with the intent of adding on pullbacks.
The second arrow shows the Master Trader Buy Setup where we recommended entering the second long position.
Here is a simplified picture of the Master Trader Buy and Sell Setup.
Using our “Keep It Simple Stupid” (K.I.S.S.) Method, here are the requirements for a Master Trader Buy Setup:
- Strong uptrend (higher highs and higher lows), with a rising 20-MA above a rising 50-MA preferred
- Controlled retracement from a V-Top (as opposed to overlapping bars, creating more resistance from a square top) with a Price Void above
- Compelling reversal at support
Then you simply enter over the reversal bar/pattern and place a protective stop under the low of the reversal bar/pattern, and manage in between using your money and position management rules.
A Master Trader Sell Setup is the opposite for downtrends where we short retracements and reversals at resistance.
The analysis is explained in nightly letter videos for subscribers.
Our subscribers are still in a full position with a protective stop. We will trail until RES gets closer to its resistance on a larger time frame, which is around $10.00, which would be a hefty return.
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