I Love Bases

A Lesson On Long Strong Base:

I did a report in the  past about how much I love being able to trade a well formed base.  The report was highlighting LONG tight bases, they can be explosive. They stand out to me because in the past I have had such huge %-Gainers when stocks broke out of them.   Do they always work? No.   To be honest, I have entered some that also just bounced around and bored me to death, and some have even broken down due to bad earnings or an FDA rejection of their testing, etc .    The Idea is that you buy near the supporting lows, so if  it drops you get stopped out with small losses,.  If it breaks out higher, the upside has huge potential.

Let me show you some examples of trades that I worked on this site before it became a premium site.   With the Ebola scare, I noticed that many of the Ebola play stocks had formed good bases.  APT, LAKE were 2 that I bought at support in the bases.

APT was stair-stepping higher and the pullbacks were being accumulated.  Suddenly …

It just exploded out of that Base.  $2 to $10 in a couple of months.

LAKE followed

You can see the writing on the above stock that I said it reminded me of the VIMC trade that I recommended and took in September.   I had also found a LONG BASE in VIMC and there are often ‘signs’ that I recognize that tell me when it is close to breaking out.

VIMC had a long base, you will see that later.  Early Sept I was accumulating &  I zoomed in to show how it was nicely climbing its 10sma.   It quickly went from $3 to $5.50 and volume was surging in.

When VIMC was at $5+.  It was breaking resistance, so I then pointed out that “I wish I could tell you how important this could be” .   This was a HUGE base  and people were telling me they sold their  gains from $4 to $5 .

SEPT 12 –  VIMC  hits $6.46

VIMC SEPT 16 it soars over $9.   I LOVE long strong bases .

I am mentioning this because in the premium reports I also pointed out a newer  semi-long base that I liked.  We have seen many form in the Energy sector actually.  Did they all explode higher?  Not yet, but some ran up 100% off their lows and this one caught my eye on FEB 27.

FEB 27 , SZYM was in the report.  Earnings were already out .

I posted that it tried to  POP & “break out” on earnings .  It was either BUY the break out or a back test of the 50sma. This base is solid and tight.

SZYM at $3.07 today.  You can see that it dropped right to the 50sma at $2.50 & reversed higher ,  finally breaking out this morning. This was at 10:30 this A.M.

SZYM now- extending higher with increasing volume.

I also mentioned and bought WRES,  but I got bored as it sold down below it’s 50sma.  It did a perfect  double bottom with late Jan lows. I do not own it,  but this is how it reacted to earnings release.   If this has bottomed on todays earnings report,  where is the top?

Many of the Bases that I have been looking at are still forming.   Some  have run up 100% as I mentioned , and like all nice runs, they also have dropped back  or gone sideways.  This can offer another buying opportunity.   I see some setting up right now that I think are going to move nicely and still look healthy.   I will have them in tomorrows premium report.   

I should mention this :   It’s not enough to just look for nice long bases.  Many of those can break down.  You also have to look at the internals and see what really going on inside the moves.  Think of it like a doctor that examines you ,  if he doesnt check the internals …the heart , the lungs , maybe an x-ray or Cat-scan-  can he tell if you are really as healthy on the inside as you appear on the outside?  No, and its the same with charts to me.   We must check to see if its breathing, does it have a healthy heart beat?  IS IT ALIVE OR DYING?  Thanks for reading along and I hope it was helpful to your studies !

~ALEX