Why do some traders use charts while others don’t?
Well, it’s simple.
It all depends on what stocks, ETFs or other assets you’re trading… in some asset classes, charts work better than others.
That’s why I stick to penny stocks.
You see, these stocks move in a way of their own… and a lot of the times, they follow the same chart patterns.
Penny stocks don’t care what the market is doing and isn’t affected by all the market-moving headlines are being thrown at traders left and right…
… so when they move, it’s really all just based on the price action in the stock, and my patterns are able to pinpoint exactly when a penny stock could make a massive move.
You’re probably wondering, Well, Jeff, what specific chart patterns do you look for in penny stocks?
For the most part, I look at moving averages, horizontal lines (support and resistance), trends, and volume.
When I pair all those together, I can spot Wall Street’s top gainers consistently, before they happen — and participate in the move higher… and I’m going to show you exactly how to do that.
What You Don’t Know About Chart Patterns
For the most part, if you ask anyone who trades penny stocks what they look for before they place a bet… chances are they’re looking at charts.
Well, it’s almost a self-fulfilling prophecy.
If a lot of traders buy a stock based on a bullish pattern… that increases the demand for the stock and builds momentum in it… and we see massive moves in them.
The thing about chart patterns is not just knowing when to get in… but also when to get out — because at some point, the longs are going to take profits… and you don’t want to be the one stuck with the bag.
So how do you actually use charts to your advantage?
Let me show you an example.
Check out the daily chart in Creative Medical Technology (CELZ).
This is one of my favorite setups — what I call the consolidation pattern.
Basically, with the consolidation pattern, all I’m looking for is a drop in the stock followed by a consolidation period — when the stocks just stall at a price level.
Thereafter, I look for a move higher in the stock before I buy the stock.
If you notice the chart in CELZ, there were actually multiple reasons to get in:
- The stock was showing one of my most profitable patterns
- There was a lot of volume (if you look at the bars below the price chart, you can see a big green volume bar that’s higher than all the previous ones)
- The stock broke above a key moving average (bullish momentum)
With that being said, I was laser-focused on this stock because I knew I wanted to get in.
So I focused on the bid and ask prices… and every time, I noticed when the stock would pull back… the bids would stack up.
By looking at that chart setup and the bid-ask spread… I figured this stock could move higher — of course, I let my clients know about it.
Just by spotting that chart pattern, I was able to pull in $1,155 in just 15 minutes — and I’m trading with a small account.
We see this type of price action all the time.
Now, if you look back to the chart… you’ll notice I was very specific with my targets. You see, there was a key resistance level around my targets. That signals to me that sellers could step in and push the stock back lower.
Not only that, but the 50-day moving average was lingering above… and that’s another key resistance level.
That’s what I mean by knowing when to get in… and when to get out.
Let’s take a look at another example.
Check out this 9-month daily chart in NaturalShrimp Inc. (SHMP)
It’s got that same pattern… and when you zoom in, there are actually some more indicators signaling it could run higher.
Notice that blue horizontal line in SHMP?
Well, that was a recent high — a key breakout level.
You’ll also notice a blue encircled area… that’s where SHMP broke above the 200-day simple moving average (SMA). If you look below the price chart, you can see volume was picking up.
Not only that, but there were clear support levels below — so I knew where my outs were in case the pattern didn’t materialize.
Based on that pattern, I figured SHMP could make a massive move…
So I bought shares and let my clients know.
Just a few hours later… the stock exploded and got right to my targets.
Now, if you notice in the alert… I had target areas.
Again, those prices were at a resistance level — letting me know it was time to get out… and I did for a nice $800 profit.
The thing is… I’m not the only one making money off my patterns… some of my clients are making a killing.
Just take a look at this chart in FuelCell Energy (FCEL).
It’s the same consolidation pattern, paired with a rise in volume and price breaks above moving averages… and many of my clients have learned to spot this simple pattern and rake in profits.
D.B. — Out of FCEL @.55 +$1500
D.S. — Out FCEL @ 0.55 +$649 IN @ 0.42 Friday
C.W. — FCEL .438-.56 +480. This went so fast couldn’t post quick enough
R.I. — just sold FCEL for +1600! In at .40 out at .54
The consolidation pattern is just one of the chart setups I use in my latest breakthrough — Boost — that allows you to find Wall Street’s top gainers ahead of time. Not only that, but I also use my Weekend Wiretap to generate passive profits over the weekend…
… and that’s helped me turn a $3,000 account into $16,149 — a 438% return in just under 3 months.
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