Identifying a Bottom

By | September 23, 2014

Are you’re looking for a stock that’s had a good sized correction that may be ready to rally again? Here’s how you use Trade Followers to identify them. First take a look at the most bullish stocks on Twitter over a longer time frame (6 months or more). In that list you want to look for gaps in the 1¬†month to 3 month range. Below is an example showing Kandi Technology (KNDI). KNDI has shown support from Traders on Twitter over the past month after a several months of weakness. This suggests that people are starting to accumulate the stock even though it is still falling. Notice Glu Mobile (GLUU) is showing the same signs.


You can also see every list KNDI is on by looking at the chart and status page. This list shows the same gap in the intermediate term.


Then take a look at the chart and you can see that bullish momentum is overwhelming bearish momentum for KNDI after a positive divergence. This is a strong sign that the stock is ready to bounce. Today KNDI is painting a hammer on a candle chart. It broke below its 200 day moving average, traded as low as $13, and has now recovered back above the 200 dma. This is good price confirmation that the sellers have been washed out and sets up a high probability trade.


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