@markminervini Cheat setup explained:-
1. Downtrend. The stock will experience an intermediate-term price correction that takes place within the context of a longer-term Stage 2 uptrend. This leg down can happen over several weeks or months.
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1. Downtrend. The stock will experience an intermediate-term price correction that takes place within the context of a longer-term Stage 2 uptrend. This leg down can happen over several weeks or months.
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It is normal to experience large price spikes along the downtrend on increased volume .
2. Uptrend. The price will attempt to rally and break its downtrend You do not want to buy just yet. It's too early because the price and volume lack. the necessary confirmation that the stock has bottomed and entered a new uptrend. The price will start to run up the right side,
usually recouping about one-third to one-half its previous decline. However, overhead supply created during the intermediate downtrend will typically be strong enough to stall the price advance and create a pause or pullback.
3. Pause. The stock will pause over a number of days or weeks and form a plateau area (the cheat), which should be contained within 5 percent to 10 percent from high point to low point.
The optimum situation is to have the cheat drift down to where the price drops below a prior low point, creating a shakeout-exactly what you'd want to see during the formation of a handle in a cup-with-handle pattern.
At this point, the stock is set up and ready to be purchased as it moves above the high of the pause. A typical sign that indicates that the stock is ready to breakout is when volume dries up dramatically, accompanied by tightness in price.
4. Breakout. As the stock rallies above the high of the plateau area, you place your buy order. The stock is now deemed to have made the turn, meaning that it probably has put in its low, and the intermediate-term trend is now up and back in sync with the longer-term Stage 2.
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