IBD: 5 base flaws

Chart Analysis Shows 5 Ways To Spot Flaws | Investor’s Business Daily

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One of the most important parts of growth-stock investing is recognizing the handful of base patterns that demonstrate bullish form. But just because a chart fits the definition of a base it doesn’t necessarily mean your chart analysis is done.

  1. too deep, should not go below 30-33% correction, handle no more than 12%
  2. Wide and Loose action is bad, like it nice and tight
  3. Poor Volume: A good base should have more up weeks in high volume than down weeks. You want upside reversals on down days.
  4. Base Forms Below 10-Week Line, Or V-Shape
  5. I could not find #5, what did I miss??
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The V shape is probably your fifth. They just put them together.

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