The “inside day pattern” is one of my favorite chart patterns that every trader needs to see.
This pattern involves looking for a stock that has made a 50-day high and then seeing two subsequent days where highs are lower and lows are higher, indicating that the days are inside each other.
Inside days show a narrowing of the range and lower volatility levels, making it a good sign of relative strength and potential breakouts.
Trading inside days allows for low-risk entries and the ability to ride the trend momentum.
Interested traders can request the stock fetcher code for scanning inside days by emailing [email protected].
Highlights
- The inside day pattern occurs when a stock’s highs get lower and lows get higher after making a 50-day high.
- This pattern resembles a mini triangle and signifies price congestion and consolidation.
- Inside days lower volatility levels, reducing risk and making it an effective strategy for buying breakouts in the direction of the trend.
- Stop orders can be used to enter and exit trades, maintaining low risk while riding uptrend momentum.
- Inside days are currently observed in stocks like Alibaba, Twitter, and the semiconductor index (SMH). The VXX and UVXY are potential options for short positions.
P.S. The Market’s Best Pattern for Trading
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The profits and performance shown are not typical, we make no future earnings claims, and you may lose money. From 2/25/20 through 7/15/24, the average win rate on published trade alerts is 72%. The average weighted rate of return on options trades was 7.82% over a 13 day average hold time.
