There is a structural phenomenon in the market

There is a structural phenomenon in the market that has been observed on both bullish and bearish side for hundreds of years, that when stock move , they move in sharp momentum bursts of 8 to 40% that last 3 to 5 days.

RESI is an example of this kind of momentum burst move in last 2 days. It came in range expansion scans 2 days ago early morning as it started to have a range expansion. Stock went up 16% in less than 48 hours.

If you want to find and trade moves like these you need to know certain things about these momentum bursts moves:

Stocks move in momentum bursts of 3 to 5 days on both bullish and bearish side

Stocks move in momentum bursts of 8 to 40% magnitude depending on price of the stock.

Stocks can give you 4 to 20% gains in 3 to 5 days during momentum burst (half of the 8 to 40% burst move)

Stocks move in momentum bursts of 5 to 50 dollars if they are high priced stock.

Stocks move in momentum bursts and no specific catalyst is required for this momentum burst.

Stocks move in momentum bursts even if they have poor or no earnings or poor or no sales.

Stocks move in momentum bursts irrespective of either being value or growth stocks.

Stocks move in momentum bursts near 52 week high

Stocks move in momentum bursts near 52 week low

Stocks move in momentum bursts near all time high

Stocks move in momentum bursts near all time low

Stocks move momentum bursts in bull market the and magnitude of momentum burst is big

Stocks move momentum bursts in bear market but the magnitude of momentum burst is small or lesser number of stocks make those burst moves and follow through might be low.

Stocks move momentum bursts in bear market to the downside.

Stocks move in momentum bursts on news day.

Stocks move in momentum bursts in the absence of news also.

Stocks move in momentum bursts in anticipation of news.

Stocks move in momentum bursts post good or bad news.

Stocks move in momentum bursts on Monday

Stocks move in momentum bursts on Tuesday

Stocks move in momentum bursts on Wednesday

Stocks move in momentum bursts on Thursday

Stocks move in momentum bursts on Friday

Stocks move in momentum bursts if the market is open.

Stocks move in momentum bursts and some bursts can be anticipated and entered with very low risk.

Stocks move in momentum bursts and you don't need to know anything about the company to profit from that.

Stocks move in momentum burst and first day of that move is a range expansion day.

Stocks move in momentum bursts and to find and trade these kind of momentum bursts all you need is simple range expansion scan and good understanding of swing trading techniques.

Methods and philosophy

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7 comments:

Anthony said...: Can you tell me the name of the indicator that you're using for your 'entry signal' as appear at the bottom of your chart?; Jan 16, 2014, 8:55:00 PM
Pradeep Bonde said...: It is range expansion indicator that looks for 4% plus move; Jan 16, 2014, 9:14:00 PM
Pradeep Bonde said...: This comment has been removed by the author.; Jan 16, 2014, 9:14:00 PM
Unknown said...: Stocks move in momentum bursts of 8 to 40% magnitude depending on price of the stock.

Do you have a detail profit target for each price level. Let us say, <5, if it rise 10%, you expect it can go up 40%, so you still have 30% room. If it is $30 stock, you may only expect 20% rise, so only 10% room left. Rewards/Risk =1, then no reason to get in.; Jan 17, 2014, 2:05:00 AM
Pradeep Bonde said...: Life is not that perfect like that. You have to be willing to live with fuzzy rules on profit post burst. I look for whatever I can get in 3 to 5 days.; Jan 17, 2014, 9:05:00 AM
ANS said...: Will one capture such stocks if we use your criteria, where C>C1 by 4% and V>100,000 and V>V1?; Jan 22, 2014, 6:01:00 PM
Pradeep Bonde said...: Yes or you can anticipate a b/o on them by going through stocks with established momentum.; Jan 22, 2014, 6:14:00 PM

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