Trading

Opportunities
Even When the
Market is Down
 Note: This chart is not a recommendation but used for sample purposes only.

Sell/Lighten

Buy

Range Trades from

Down Price Channels
Downtrends usually form themselves with
parallel lines. When this happens, consider to:

• Buy into rebounds from channel lows

• Sell/lighten as it rallies closer to resistance

(normally towards downtrend lines or nearby
Mov. Averages)
 Note: This chart is not a recommendation but used for sample purposes only.

Buy more
On breakout

Lighten if
resistance holds

Buy

Range Trades from Stronger

Side-swingers
These are stocks showing more viable
strength, building a sideways range.

• When you see a rectangular pattern, range

trade the lows and highs
• If the pattern looks prospective, lighten on
resistance but keep a decent size to chance a
breakout
• If resistance breaks, you can always add up
• Support stops to be placed on range lows
 Note: This chart is not a recommendation but used for sample purposes only.

Oversold Zones

Oversold Rebounds for

Mean Reversion
When stocks accelerate downwards,
triggering an oversold condition in the
RSI (<30%), watch out for:
• Rebounds from oversold conditions
could drive prices back to their 50 or
even their 100 - 200-day EMAs or down
trendlines

• Patterns or channels can help you assess

the possible lows and highs. You can
range trade them if the range is wide
 Note: This chart is not a recommendation but used for sample purposes only.

Support Retests

W or Higher-Low Bases
(Support Retests)
Eventually some decliners may build
solid bases. Stay on guard when:
• It shows “W” like bases or higher-low
bottoms (that doubly confirm support)
• Enables wider rally swings or even drive
possible trend reversals (for more
advances)
Be ready to BUY once the 2nd base swings
are shown. You can lighten on resistance or
buy more if resistance breaks.
 Note: This chart is not a recommendation but used for sample purposes only.

Rallies with Down

Trendline Breaks
Downtrends may also break or soften,
offering wider rallies, so keep these in
mind:
• These rallies can often warn you by
showing down trendlines breaking
(especially if they do so with key EMAs
breaking as well), which can allow for
some quick trading
• Target next EMAs (if wide enough),
channel highs (if present) or next major
highs (seen in the recent past)
“When going for a trade into an
oversold downtrend, take this
only as a brief tactical trade… by
controlling your fund exposure
and limiting your expectations
for a rally to make money in”

“Remember when going against

a trend, I wouldn’t want you to
be all out aggressive."
— Juanis Barredo
Chief Technical Analyst