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REE, Great Bearish Engulfing
REE has formed a classic Bearish Engulfing after a more than 300% rise in only 2 months. Notice the gigantic volume today, more than 2x the volume of the previous day, and the largest in the stock's history. A large gap down would certainly confirm this pattern is valid. If price can break through the high today that would invalidate the candle.
Comment
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Comment by Stocks To Buy on September 11, 2010 at 12:17pm -
REE has support around $5.35 as well as $5.21. If $5.21 is broken I think we could see sub $5.
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Comment by Matt Lauchaire on September 10, 2010 at 2:13pm -
I hope it works out for you SVT. Just remember to place a buy to cover order. First resistance is at yesterday's high of $5.73, the big resistance is the high of the Bearish Engulfing at $6.32.
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Comment by SVT on September 10, 2010 at 12:35pm -
i shorted it today!
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Comment by Matt Lauchaire on September 9, 2010 at 12:20pm
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I personally don't trade stocks anymore because I don't like holding anything overnight because of some of the wild gaps that have gone against me in the past. I do like to look through the scans of Candlestick Reversal Patterns though to get an idea of whether more stocks are breaking out to the upside or downside. REE gapped up and didn't close the gap, so even though this pattern can still work, it won't be an immediate reversal. The way I would trade it is to look for a sign of weakness sometime next week, a gap up that closes or a gap down would give a low-risk entry, and if filled placing a buy-stop directly above the gap.
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Comment by Stocks To Buy on September 9, 2010 at 7:25am
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Yes I've noticed this runup....are you shorting REE?
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