How To: Finding Potentially Oversold Stocks ( 1 + 1 = 3 ??? )

With the big market drop on Friday (Dow down 3% and NADAQ almost 4%) I thought I would have a look for some stocks that might have been oversold and their drop exaggerated by the overall market falling.

What will sometimes happen is some bad news plus the overall market having bad news will end up with 1 + 1 = 3 and an overreaction as stop losses get triggered at market causing others to trigger and more to trigger and so on and so on.

TradingView has a bunch of built in tools to make finding these stocks easy to discover and this video is more about showing you different ways to use these tools as opposed to any specific trading recommendations.

Might be a way for you to look at trading differently and seeing if you think there might be any bargains out there that you would like to investigate further. Catch is they are down for a reason, so do your analysis and cover your position in case they have more pain in store :)

Comment:

DOMO is still selling off in the pre-market.

18.92 -1.77 (-8.55%)
Pre-Market: 04:11AM EDT

Another way to trade it or similar stocks you are interested in might be to use a trailing buy order so that way it follows the price down and then enters when the stock comes back up 5% or whatever you set your trail value to.

Comment:

So if you had managed to get in at $18.92 in the early pre-market using a broker like IB, DOMO ended up with a daily high of $21.49 for about a 13% gain.

I only managed to buy at open using my TradeStation account and so got in at $20.05 so showing a minor gain. Have my stop loss at $19.00 for now.