Often when stocks or indexes fall there will be good support levels for bounces. Therefore, you want to look at multiple time frames and have a chart that goes back several months to find intraday trades and possible 1-2 day swings. In this example on MGM the stock was in virtual free fall and found support in the $8.80- $9.00 gap window area. This was identified by InTheMoneyStocks.com traders by looking back to the September 3rd date and seeing a gap window. It is also important to recognize that MGM has been down quite a bit and well off it’s high. Therefore, after an extended move lower it is due for a bounce. Remember nothing declines in a straight line. Always remember to use stops and once the trade is in the money take half the trade off for a profit and move the stop into the money or break even. Then you can look to sell the rest of the position at the next strong resistance level.
