Wednesday, December 06, 2006

You Want Base and Explode ??

The Base and Explode pattern is for real, and I could almost argue that it is the best daytrading pattern out there bar none. Probably a top 5 swing trading pattern in my mind.

The only problem is finding those low volume, already trending, narrow range stocks and actively stalking it before the explosion occurs.

I was not able to catch today's explosion in NMGC, but boy oh boy, do I wish I was watching it yesterday. Buying the break above 5.4 was the way to play this stock this morning. Note the volume spike occurring in the second candle. 5.70 would also have made a good second entry, although it may not meet the reward criteria for some traders.


D TradeIdeas said...

Sounds like you are looking for the NR7 pattern that TraderMike likes alot too.
Here's a definition of what the pattern is:

is that right?

Phileo said...

Hi TradeIdeas,

I would consider the Base and Explode pattern to be specific subset of the NR7. The break of the NR7 pattern in the direction of the prevailing trend is not always accompanied by volume, but based and explode is always a tsunami of buyers or sellers. Check out this post for a better explanation of Base and Explode.

Phileo said...

Hi TradeIdeas,

Forgot to mention - nice website(s) that you've got there! Anymore plans to hold another contest perchance ?
Thanks for dropping by to visit !