Here’s the beginning of a swing trade with VFF.
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VFF was a previous big winner than had suffered a big drop off the March high. Huge drops are common for stocks that post big gains, even from among the best performers, so the drop should not be discouraging.
The second week of May the stock dropped to a 1-month low and then gapped up and posted a big gain on big volume the next day. The gains changes the character of the stock.
Zooming in with a 15-min chart (the big gain is highlighted in yellow), there was an entry the next day at the 21 EMA and then another one the following day at the same moving average.
The first big move up on volume jerks the stock out of its funk. Then zoom in with an intraday chart and find a moving average that’s in sync with the stock.
Such a simple system that gets the odds in your favor.
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BLOG: Moving Averages – Everything You Need to Know