This position is a volatile position to undertake, however the bounce can be dramatic at times... or there can be no bounce at all.... reaching the 10 and 20 day averages should be doable... getting to the top of the bollinger is another story... and if the price does this... It will most likely... 98% of the time retrace (this is a downtrend.... it has to pass through a range.... and that is the strategy associated with a downtrend or a ranging price for a high percentage average to be present for accuracy to prevail)...
As the price moves to the support where it bounced... you must see the lower bollinger rising to intercept the price... this is a signal that volatility is decreasing.... Low volume signifies a bottom in a lot of cases if is relative to a recent high, and a downtrend is identifiable... We are looking for lower bollinger touch for a rising low....... a rising low on a lower bollinger touch to signify a bottom...
If the lower bollinger does not rise ... be extremely cautious for the price to break to a new low... try for break even,, but make a move for safety and wait for the next signal... it may take another try to land the bottom.. but it is worth the effort and a couple of razor cuts.
This upper bollinger touch will likely take place over a period of time say about a business week or maybe more... I must point out that this a down trend and upper bollinger touches are sell signals... don't ignore it.
If the broad market was in a down trend... (which it is not at this point) this type of trade would be doubly dangerous and a tight stop would even be more important... Still this type of trade dictates it be watched extremely close... On the flip side if we have landed the bottom we can look forward to a solid gain over time... very easy to walk away with a profit if the bottom comes in...
I should point out.. I have considered some charting visual conditions that are usually present in most bounces... they have been described in the previous posts...
GLTA Lostoutwest
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