Is a base pattern valid if it starts after a downtrend instead of an uptrend?

A strong base of any type should always have a price uptrend prior to the beginning of the base. A base that forms after a downtrend is prone to failure because it has a lot of overhead supply. That is, there are many holders waiting to sell as soon as the stock goes back up. Look for at least a 30% increase in price in the prior uptrend. It’s also important to have improving relative strength and a substantial increase in volume at some points in the prior uptrend.

Leave a Reply

Your email address will not be published. Required fields are marked *