Reflex bounce | stockbee


Reflex bounce

Market is expected to open up. the Asian markets were up. Europe had good day. Any such bounce at this stage I would treat as natural reflex bounce after 3 weeks of down move. Typically such bounces result in tests and retest.
The real importance of the bounce will be reflected in breadth numbers. If breadth numbers start recovering fast then the bounce might have leg. Any change of breadth trend will be apparent in breadth thrust numbers. If we get breadth thrust of 2 plus then it tells you there is serious buying to support the bounce attempt.
At this stage some beaten down stocks are bouncing , but at the same time some of the stocks that were holding up well have started breaking down. The retail sector was good example of that.
Strategic patience is important here if you are swing trader focussed on growth and momentum swing trader. If you do not preserve your capital you might have death by thousand cuts. This is an environment for day traders.

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