Take a look at these five stocks that Robinhood traders piled into over the last 24 hours.
There’s a pattern with these top five additions to Robinhood accounts…
They’re momentum stocks that had a large move.
That signals to me there’s a lot of fear of missing out (FOMO) and traders are just chasing action.
If I know anything about momentum stocks, it’s that they typically follow patterns, and I’ve noticed these new traders aren’t respecting levels.
I want to show you why it’s important to respect levels, and the one pattern I believe is powerful when it comes to momentum stocks…
And reveal three hot stocks to keep an eye on.
Why Momentum Traders Should Keep This Tool Handy
There’s one tool I love to use after momentum stocks make a large move… and I believe it’s a solution for chasing FOMO.
You see, after a stock has a massive move, it typically pulls back and takes a breather, before it retraces that move and tries to retest a high.
The Fibonacci retracement tool helps with identifying key support levels, and where it may be advantageous to start looking for entries.
How does it work?
I believe the best way is to learn through examples, and you’re in luck.
I’ve identified three stocks in which I believe the Fibonacci retracement comes into play.
Three Hot Stocks To Keep An Eye On
To me, patterns are nothing more than a visual of where traders are making moves. If buyers overwhelm the sellers at a specific level, that’s an area of support and the stock should bounce from there.
On the flip side, if sellers outnumber buyers at a specific price level, it would be considered a resistance level. Consequently, the price would fall.
Let me show you with one stock on my radar.
RumbleOn Inc. (RMBL)
Here’s what I sent out to subscribers about RMBL.
For RMBL, I’m interested if it’s above $21, but technically it’s in play above $19, but for today, I’m looking for price action trading at or above $21 to indicate to me it might fire long.
Notice how the stock tried to stay below the $20 level and quickly popped right back up. That just so happens to be right around a key Fibonacci retracement level.
Once the stock retraced and got above that, I established a long position… and if the buyers start to step in and demand picks up, I wouldn’t be surprised if RMBL makes a move higher.
You see, while many traders would try to chase the stock after it made a move from about $10 to $38.82… it’s important to be patient and identify key levels.
I’m sure there were some that bought the high and lost 50% real quick.
Next up, take a look at Immuron (IMRN).
Immuron Ltd. (IMRN)
For IMRN technically above $12 and it’s in play, but for this morning I want to see it above $13.50 to consider going for that squeeze.
Again, the stock held a key Fibonacci retracement level right around $12.
I also established a position in IMRN, as I believe the demand can pick up for the stock and there’s tremendous upside potential.
With this trade, I wouldn’t be surprised if it gets to the $15 level.
Last, but not least, there’s Brightcove (BCOV).
Brightcove Inc. (BCOV)
As you can see, BCOV is right around key Fibonacci retracement levels at $10.62 and $11.27.
If those levels hold, and there’s demand for the stock… I wouldn’t be surprised if it tries to retest its recent high at $13.36.
As you can see, there’s no need to let emotions run your trading… and patterns can be helpful.
If you’re able to identify these setups, I believe it can make trading easier because you can develop trade plans and not chase stocks.
If you want to learn how I use patterns and am able to trade on a part-time schedule, then check out this important training session.
You’ll learn the same patterns I use to identify momentum stocks BEFORE they move…
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