DefinitionofRecommendations

BuytheDipsTradersoughttojustbuythisstockwheneveritgoesdown,aslong
asitstrendisstillup.Inthiscase,watchtheindicatedsupportleveltodetermineif
thestrategyofbuyingthedipsisstillappropriateornot.Duringuptrends,support
levels should not be violated or else the trend may change to sideways or even
down.Buyingondips,duringanuptrend,isthesafestwaytogetintoastock.
Sell on StrengthTradersought tojustsellthisstockwheneveritgoesdown,as
long as its trend is still down. In this case, watch the indicated resistance level to
determine if the strategy of selling on strength is still appropriate or not. During
downtrends,resistancelevelsshouldnotbeviolatedorelsethetrendmaychange
to sideways or even down. Selling on strength, during a downtrend, is usually a
goodwaytogetoutofastock.
HoldThestockisverymuchinanuptrendbutisalreadytoohightobuy.Inthis
case, if you have a position on the stock, you ought to just hold in order to
maximizetheuptrend.Iusuallyplaceanasterisk(*)besidethesupportwheneverI
give a hold recommendation. The reason for this is that the support may not
necessarilybeamajoronebutonlyasuggestedstopinordertoprotectwhatever
gainsyoumayhavehadalready.
TakeProfitsThestockisstillinanuptrendbutthesuggestedstopgothit.Inthis
case,Iamtryingtoprotectwhatever gainsonehashadalready.Theworsething
that could happen to anyone in the market is turn profits into losses. When I
recommend taking profits, it does not necessarily mean that the stock would go
down,eventhoughitcould.
Buy on the Breakout This tells you to buy if the resistance is taken out to the
upside.Incaseslikethese,thestockisusuallyinadowntrendorinasidewaystrend
anditisassumedthatabreakoftheresistancewillcausethestocktochange its
trendintoanuptrend.Althoughquiteriskyattimes,buyingonthebreakoutwould
mean buying on the first sign of an uptrend. The reason why this is quite risky is
becauseoneisassumingthatachangein trendwillhappen.Inthestockmarket,
oneoughttojustfollowthetrend,andnotassumethatachangewillhappen.On
theflipside,ifthebreakoutisindeedlegitimate,onewouldbeabletobuyatthe
earliest sign of an uptrend. I usually place a plus sign (+) beside the resistance
wheneverIgivea'buyonthebreakout'recommendation
Sell on Breakdown This tells you to sell if the support is taken out to the
downside. In cases like these, the stock is usually in an uptrend or in a sideways
trendanditisassumedthatabreakofthesupportwillcausethestocktochange

itstrendintoadowntrend.Althoughquiteriskyattimes,sellingonthebreakdown
wouldmeansellingonthefirstsignofadowntrend.Thereasonwhythisisquite
risky is because one is assuming that a change in trend will happen. In the stock
market, one ought to just follow the trend, and not assume that a change will
happen.Ontheflipside,ifthebreakdownisindeedlegitimate,onewouldbeable
tosellattheearliestsignofadowntrend.
Trade the Range In this case, the stock is usually in a sideways trend. During
sideways movements, the stock simply oscillates or range trades between its
support and resistance. Traders who specialize in buying lows and selling highs
usuallythriveduringthesesituations.Justmakesuretorespectyourstops,incase
thestockstartstotrend.
Buy if Support Holds In this case, the stock is usually in a sideways or upward
trend and is currently approaching or testing support. When this happens, I
recommendabuyonthefirstbullishcandlestickreversal.Thisrecommendationis
similarto"buythedips",exceptthatonewillbebuyingwhenthestockisalready
movingup.Ifbuyingthedipsisasafewayofgoinglong,thisrecommendationis
evensafer.Rememberthoughthatastockinanuptrendisalwayssafertobuyas
opposedtoastockinasidewaystrend.
Sell if Resistance Holds In this case, the stock is usually in a sideways or
downward trend and is currently approaching or testing resistance. When this
happens, I recommend a sell on the first bearish candlestick reversal. This
recommendation is similar to "sell on strength", except that one will be selling
when the stock is already moving down. If selling on strength is a good way of
selling, this recommendation is even better. Remember though that a stock in a
downtrend is always more probable to go down as opposed to a stock in a
sidewaystrend.
TradingBuyThisisasituationwhereinthestockistrendingdownbutisalready
inanextremelyoversoldcondition.Thistypeofstrategyisquiteriskyforthosewho
donotknowwhattheyaredoingsinceoneisgoingagainstthetrend.Mindyou,
whengoingagainstastockthatistrendingdown,onemayneverknowwherethe
bottom is. However, one may profit quite quickly and significantly using this
strategysinceastockthatisinanextremelyoversoldconditionhasthepotentialto
reboundratherstrongly.Whilethisstrategymaybethemostriskyofall,becauseof
thegainsthatcanbeachieved,itiscertainlyworthit.