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The Pullback Off Highs Pattern — It’s All You Need To Know

By Chart School
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Courtesy of David Grandey.

What is the Pullback Off Highs pattern?  Simple, it’s when a stock pulls back in a orderly manner from a recent high to support of an upward trendline and/or the 50-day moving average. 

Why does this matter?  Because it allows you to buy leading stocks at low-risk, alternative entry points vs. chasing a breakout and running the risk of being stopped out should the stock consolidate its breakout as most do before eventually moving higher.

The action in POT this week is a great example:

 

 

An orderly pullback to support at the blue line and the 50-day moving average.  POT triggered a long side trade by emerging above the pink line.

Just a few days later:

POT traded up to resistance and promptly backed away — 45 to 48 in a couple of days is a great trade!
Did you know that just $500 a week in gains yields the following annual returns?
  • 96% return on a $25,000 account
  • 48% return on a $50,000 account
  • 24% return on a $100,000 account

To learn more, sign up for David’s free newsletter and receive the free report from All About Trends – “How To Outperform 90% Of Wall Street With Just $500 A Week.” Tell David PSW sent you. – Ilene

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Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither PSW Investments, LLC d/b/a PhilStockWorld (PSW) nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither PSW nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance, including the tracking of virtual trades and portfolios for educational purposes, is not necessarily indicative of future results. Neither Phil, Optrader, or anyone related to PSW is a registered financial adviser and they may hold positions in the stocks mentioned, which may change at any time without notice. Do not buy or sell based on anything that is written here, the risk of loss in trading is great.

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