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Just last Friday, I spoke to you about confirmations…

More specifically, I explained that one of my favorite ways to know that a stock wants to go higher – is to spot it failing to go lower where it should have.

I used the below SGOC chart as a specific real-time example of how this works out:

I noted that based on the morning action with multiple fails and a gradual sell off to below VWAP, the stock looked done and to many traders was either a sell-out or a short.

Yet, it managed to pick up steam in the orange area – a place whereby all logical means it should’ve failed…

What followed was one of the most impressive low float run ups I’ve seen recently, as SGOC reached a whopping high of $18.80 later in the day.

Today, I’ll share 2 more names I’m watching for their “refusal to fail.”

Digital Brands Group – DBGI

  • Market Cap: 65.5M
  • Free Floating Shares: 5.89M
  • Short Interest: 0.5%
  • ATR: 1.02

There are multiple “refusals” to note here – the stock only IPOd about 2 months back and has held the $3 level very cleanly, even though it seemed like a complete flop at that point.

It then gained some steam, but each time failed to meltdown lower, holding the $4.20-$4.50 area.

It’s doing the same exact thing now and until it shows me it can’t hold the potential fail areas – I see no reason to be bearish.

Plan: I’ll consider a long trade on any protracted holds above $4.50, ideally above $5 for another leg higher, into the $8 area and further.

Forward Pharma – FWP

  • Market Cap: 55.31M
  • Free Floating Shares: 0.48M
  • Short Interest: 1.48%
  • ATR: 0.60

This is an incredibly thin name with a very low float, so beware of lacking liquidity if you do decide to trade ir.

But, nonetheless, much like others on this list, there are a few things I like – if you look closely it has had many pops and immediate fails.

YET, none of these broke down – all the fails got rejected at prior support and the stock gradually moved higher and higher.

The same exact thing just happened again, over 3 weeks ago – the stock popped and dipped, yet got quickly rebought and is now flagging near the highs.

Plan: I’ll consider a long if $7.25 holds for a final breakout move to $10 and ideally far beyond that.

Author:
Jason Bond

Jason taught himself to trade while working as a full-time gym teacher; his trading profits grew eventually allowed him to free himself of over $250,000 in student loans!

Now a multimillionaire and a highly skilled trader and trading coach, Over 30,000 people credit Jason with teaching them how to trade and find profitable trades. Jason specializes in both swing trades and in selling options using spread trades, which balance the risk of selling options. Jason is Co-Founder of RagingBull.com and the RagingBull.com Foundation which donates trading profits to charity. So far the foundation donated over $600,000 to charity.

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