by Mike Perras
1 - These are not momentum plays as yet. Thus easier to position yourself, as the stock has not started a breakout.
2 - Double Bottoms by my definition are stocks that are on my radar only, as they are close to a breakout point. When that's confirmed, I'm a more confident buyer.
3 - People who have shorted these stocks have likely already made their money on the way down to the Double Bottom. If they hold on too long and a recovery or breakout occurs, they will have to cover. In most cases, these shorters are pretty much gone already.
4 - Double Bottom stocks tend to be more of a conservative technical trade. On the surface these stocks seem to have little interest from the street. That said, when a true breakout happens, there tends to be more authentic buying and not flipping, as the technical traders are usually the main buyers.
5 - I don't have to be watching my screen all day. I can set up my Double Bottom alerts in Yahoo and receive an email when the stock reaches my breakout price target.
There are numerous ways to trade stocks. I believe the Double Bottom investment style is extremely underrated and can deliver some very attractive gains, with a minimum of effort. If you consider yourself a conservative investor or trader, who is willing to wait for the proper time to buy, then the Double Bottom approach is very worthy of consideration.
You are welcome to visit my blog for more details. www.thedoublebottom.blogspot.com
Best Wishes Always,
Mike Perras P.Mgr
About the Author
Mike Perras is a former broadcast executive, freelance journalist, investor and college teacher. You can write to him at mikeperras@hotmail.com If you would like to share this article with others, please feel free to do so. Or visit his blog at http://www.thedoublebottom.blogspot.com
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