Uptrend Play

1. A stock that is moving higher in a fairly uniform manner

2. This pattern usually affords you the opportunity to add to your original position

3. Stay long if the stock maintains the uptrend

4. Minor pullbacks should not be mistaken for weakness

a. If each upmove is 10 cents then a pullback of 5 cents on the bid is not something to be concerned about
b. If the bid were to drop below the price where the most recent upmove began you should get out
i. Look at how quickly the bid is dropping to determine whether you must hit a bid to get out
ii. If the bid has stopped dropping but the stock has violated the uptrend then you should place an offer to sell the
stock via SDOT at the same price as the lowest offer. If you don’t get taken then lower your price accordingly

5. look at the 3-minute and 5-minute charts to help identify the trend line

6. Each pullback should be small and fairly uniform

7. Each pullback should have light volume

8. But if there is heavy trading on the bid after a pullback the bid should hold

9. Buy on bid if pullbacks are minor. Bid buys should be after the bid has stopped dropping
a. Place a bid through SDOT at the best bid price
b. If your bid isn’t being hit raise your bid
c. If your bid still isn’t being hit be prepared to pay the offer as soon as the spread narrows to a reasonable level or
the stock begins to print on the offer

10. If offers come too close to bid then pay the offer.

11. Once you have determined the uniform nature of the upmoves it is easier for you to buy more stock on the minor
pullbacks because you have a good sense of your risk/reward ratio

12. If the uptrend begins to get steeper this means that more people have recognized the strength of the stock and
are competing to get long

13. If the uptrend becomes too vertical the move may be almost over. Be prepared to take a sale as soon as the
offers stop lifting. If you cannot get a sale on or close to the offer you should hit the bid fairly quickly

14. On the other hand, if upmoves become more shallow this may indicate toppiness
a. Begin to follow the bids closely. Are there less? Are they getting hit more frequently?? Be prepared to get out

15. If the bid drops below the level from where the most recent leg up began then get out

16. Three Options

a. Go low offer on SDOT to a level you believe you have a reasonable chance for a sale
b. Enter an SDOT order at the Best Bid price
c. Downside overlap the Best Bid with an SDOT order to ensure you will get out

17. Determining which of the above options to use is based on the speed at which your stock is dropping and where it
is printing. If people are aggressively going low offer 1 penny above the highest bid it is unlikely you will get out higher
than the bid price. If the bid has stopped dropping and there aren’t a lot of prints at the bid price you should be able to
get taken higher than the bid price.
18. Once you are flat the stock continue to watch it closely

19. See if it resumes its uptrend

20. If it resumes its uptrend try to get back in

21. Do Not Short. Most new traders lose money by attempting to short stocks that are moving higher. Just because
you sold your long to early don’t get angry and start shorting. We will give you scenarios where shorting is
appropriate. A STOCK TRENDING UP IS NOT ONE OF THEM.

22. People will be quicker to hit bids in an A list stock when they believe that the uptrend is over. There will be those
trying to short the stock as well as those long trying not to get beaten out by the shorts. This will afford you the
opportunity to get valuable information
a. After seeing a bunch of bid hits you will know how much buying interest is still there.
b. If offers begin to lift the uptrend will probably resume

23. Steady uptrends are less likely to occur in an A list stock because of the ability to hit the stock on a downtick. You
must factor this in to your thought process.

24. There are two ways to take sales as the stock is moving higher
a. Sell at the end of each upmove or
b. Wait until the uptrend has been violated

25. How you take profits will depend on your trading style. Some like to continually book profits. Others will hold their
entire position unless the trend is clearly broken. Either method is acceptable.

26. Do not overreact to a dropped bid after a leg up. It is expected when the stock stops moving up that bids close to
the offer will get hit. Many are trained to trade this way. The key is to watch the stock after the initial bid hitting.

RECAP

1. An uptrending stock should be moving fairly uniformly

2. Observe the prints after each minor pullback

3. Place a bid on the bid after each minor pullback

4. Take a loss if after a minor pullback the stock begins to pullback a second time

5. Consider selling some of your position after each upmove ends

6. If you have gotten flat after an upmove you can buy your stock back into a small pullback or after the previous high
is taken out
Click picture to view in full size
Click picture to view in full size