At my ATP service, we focus on crowd behaviors and how we can take advantage of common herd instincts. Its very common for traders and investors to panic buy and panic sell. They like to chase winners higher and then sell pullbacks in strong stocks for losses. At ATP, our MRM (Momentum Reversal Method) understands those patterns and we look for them to buy into pullbacks and sell into reversals. Even during this recent pullback we booked gains of 8% on QCOR, 10-13% on RENN, and 8.8% on VELT all this week.
There is no better opportunity than a strong fundamentals based small cap company that is experiencing a solid pullback in stock price. When we match up fundamentals with a “waterfall” decline, we can buy near the bottom pivots of crowd panic and then sell as the crowd comes back into the stock. Its very common for “stop losses” to be run on the downside, triggering a cascading type short term chart pattern. As each stop loss order triggers, it in turn triggers more of the herd to put in market sell orders in a panic, which then triggers further stop loss orders.
This creates the MRM pattern we look to buy into for the reversal. Recent examples are QCOR that dropped from 38 to 34.80 and we alerted to buy more, its now trading at 40-41. Another one is a sideways crowd pattern in RENN, we bought at 5.45 as the multi week pattern ended, and a few days later the stock was trading at 6.70.
Below is a very recent sample of an actual ATP MRM trade we initiated this week in VELT. This is a mobile advertising firm out of Europe that was pulling back in price after a strong runup. We loved the valuation and metrics, and we liked the pullback pattern. I alerted my partners to buy over 1-2 days and scale in to the stock. The price went from 11.80 to 11.25 during that 24 odd hour window, and that is where we worked into our positions. The stock then reversed to the upside a day later and we sold for 8.8% gains.
Another recent 18% gainer sample here on INVN
A classic MRM Trade… consider joining us and trying us for 90 days with a $150 off coupon offer, and we will include TheMarketTrendForecast.com as well. Read more and sign up here: www.activetradingpartners.com/mrm
