How to trade early trend reversals

Jea Yu has been involved with the equities markets for over 10-years. He specializes with intraday trading in the U.S. equities and futures markets. To receive a free 7 day trial to Jea Yu's Underground Trading Pit, click here or call 888.484.8220 ext. 1.

Uptrends are defined as higher highs and higher lows on a chart. With my methods, I like to actually QUANTIFY the value of those higher highs and lows by using the 5 and 15 period simple moving averages. The rule with playing uptrends is to step in on the pullbacks to the 5 period moving averages. However, when the 5 period moving averages break, then we watch the stochastics to see if they slip the 80 bands or even better form mini inverse pups for a tightening target to the 15 period moving averages and lower Bollinger bands.

(AAPL | Quote | Chart | News | PowerRating) was a trade we hit this morning. We finally nailed the uptrend reversals when the 3/8 min took mini inverse pup lean downs. Dual mini inv pups are strong formations to consider taking on the short side. The nice thing is that the 5 period moving averages are the key resistances. The initial shorts at 62.75 was a rejection off the 8 min 5s with mini inverse pups and then the next short at 62.15 was off the 3 min 5 rejections on the mini inverse pups.





Peak earnings period is on the horizon. Volatility and momentum will be coming back into the market.

Jea Yu