GEVO and CERE both ran up this morning so I had my eye on any continued momentum as I missed both moves on the long side (I am a long sided trader for the most part) so keeping both charts up all day is something I tend to do. Drawing some simple technical lines is usually how I spot alot of things I take actionable trades on.
I was familiar with CERE as far as trading it goes, and knew it recently had a reverse split as well, knowing this information ahead of time is just another advantage in trading as a whole. With a recent reverse split and the market as crazy as it is now, these can run faster and farther than most think.
CERE had something similar as far as products as GEVO today (reason for sympathy) which is why they ran in tandem to each other. Now onto the chart and what I saw.
After that 1st lower high formed on the peak, I simply drew the line across and was looking for a pop back over that line, the lower line was the support on the downtrend, which in turn you can use later (if it does pop back over top downtrend line) as support when longing the trade.
After that cross occured you want to still avoid buying into a potential double top so you let it trend out for a little bit, looking for two key things. No major pull on volume and what I circled, volume and upward momentum. With the biggest candle on the day I alerted in chat. Keep in mind, your lower line should be your downside risk (or whatever your comfortable with on your position sizing).
It is never easy to tell where these can go, but I love the types of moves, and with everything all combined together, sympathy, low float due to reverse split and new highs, they can….well…fly.
Hopefully you scale out on the way up, but also if you have any questions about this type of trade leave a comment below.