Climactic Buy Setup on Major Support
Climactic Buy Setup (CBS) on major
support (MS). Until the previous day
NBTY closed with 10 out of 11 daily red
candlesticks. It is a CBS because it is down at
least five days; is far from its 20MA; had a
pick up in volume; and had a reversal bar on the
previous day. It closed with a Bullish Changing
of the Guard (+COG), since it closed over its
opening price. It is in an area of a major prior
low, which makes it more potent Buy Setup.
Additionally, the last five trading days have
been on increasing volume, suggesting that the
last of longs have been shaken out, and demand
was great enough to halt the stock and make it
close over its opening price, and in the upper
50% of the day’s range. The far distance from
its 20MA also suggests a snap back is at hand.
chart courtesy of
Tip: A CBS with a +COG
in an area of a prior major low often produces a
tradable bounce as the relentless selling has
come to a short-term end.
Buy over the high made during the first 30
minutes of trading, with a protective stop under
Target in the area of $17.50 to $18.00.
NBTY triggered 30-min. high
entry and its explosive move provided the target
to the high $17’s in a single trading day!