What is the Pullback Off Highs pattern? Simple, it’s when a stock pulls back in a orderly manner from a recent high to support of an upward trendline and/or the 50-day moving average.

Why does this matter? Because it allows you to buy leading stocks at low-risk, alternative entry points vs. chasing a breakout and running the risk of being stopped out should the stock consolidate its breakout as most do before eventually moving higher.

The action in POT and MOS this week are great examples:

pot21612-1.png

An orderly pullback to support at the blue line and the 50-day moving average. POT triggered a long side trade by emerging above the pink line.

Just a few days later:

pot22212.png
POT traded up to resistance and promptly backed away — 45 to 48 in a couple of days is a great trade!
Like POT, MOS staged a nice pullback to support and the 50-day and then POW!
mos22212.png
While buying stocks that have pulled back to support is half the battle, the other important piece is taking your profits when you have them. The chart of YGE below shows why:
yge22412.png

Everyday we scan for issues that are in clearly defined uptrends that are Pulling back Off Highs. Our daily watch list identifies stocks that are showing this pattern for you to be aware of IN ADVANCE.

To learn more and receive our free report — “How To Outperform 90% Of Wall Street With Just $500 A Week”, sign up for our free newsletter.