Open Below 1M EMA above 5M EMA

Strategies

Usually there will be a defined premarket resistance level. The premarket level keeps dropping and eventually falls below the 1M EMA right before market open, where the stock will open.

  • There is a predefined premarket resistance level. May be an early entry point (2nd Bar).
  • If the overall news is bad it will keep dropping.
  • If no significant news, after the initial drop, it will comeback to the 9/15 EMAs.
  • Once the stock starts coming back up – the open/1M EMA or the pre-market resistance may serve as the resistance level

One reason for this scenario is that the stock has had a good run and is now flattening so people decide to sell – anticipating a decline.

Based on 24 December, 2019

Category: OPEN BELOW 1M EMA ABOVE 5M EMA

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