PACB - Buy the dips (Anatomy of a multi-bagger)
Recently there are many small stocks that broke out of a long term base spanning 2 years or more. How do we identify penny stocks with good odds of being a multi-bagger?
PACB is one such example with the right criteria that increased it's odds of having a trend that is sustainable to great extends.
Criteria:
1. long term base/bottoming formation (preferably 2 years or more)
2. breakup of a long term resistence with good volume (scroll out at least 2-5 years to see this resistence). This is when we first begin to stake.
3. retest of this breakup level several days or a couple of weeks later. Rejecting this level will affirm that the long term resistence has now turned support.
4. Began a strong uptrend with short term retracement that is usually not more than 38% of the last swing up. Pennants and flags are usually seen during those dips.
We can add to our positions (especially in the initial few dips) and raise our trailing stops to several ticks below the last dip. However this could mean we get stopped out prematurely at times and might need to re-establish positions if the chart looks right again.
Remember we are talking about odds here, not guarantees. :) Money management and position sizing is still needed to ensure we do not lose our pants should the trade not work out.
Good luck!
Disclaimer: This is just my own analysis and opinion for discussion and is not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance. Thank you. Feel free to give me your thoughts ! :)
PACB is one such example with the right criteria that increased it's odds of having a trend that is sustainable to great extends.
Criteria:
1. long term base/bottoming formation (preferably 2 years or more)
2. breakup of a long term resistence with good volume (scroll out at least 2-5 years to see this resistence). This is when we first begin to stake.
3. retest of this breakup level several days or a couple of weeks later. Rejecting this level will affirm that the long term resistence has now turned support.
4. Began a strong uptrend with short term retracement that is usually not more than 38% of the last swing up. Pennants and flags are usually seen during those dips.
We can add to our positions (especially in the initial few dips) and raise our trailing stops to several ticks below the last dip. However this could mean we get stopped out prematurely at times and might need to re-establish positions if the chart looks right again.
Remember we are talking about odds here, not guarantees. :) Money management and position sizing is still needed to ensure we do not lose our pants should the trade not work out.
Good luck!
Disclaimer: This is just my own analysis and opinion for discussion and is not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance. Thank you. Feel free to give me your thoughts ! :)