Trading Strategy: Buy Setup on trend line and minor support. OVTI was in a powerful Stage 2 on the daily chart, as shown by the series of higher highs (HH) and higher lows (HL). It has sold off for three days, back to an area of minor support from the prior consolidation. Because of the deep retracement, one should not be looking for a new high right away, but a tradable bounce nevertheless. It is also considered to be a Guerrilla^TM Bullish Setup because it was down at least two days, and previous day’s bar is a Bearish 20/20 bar (wide range bar with little tails). It closed at the low, on prior support. This also happens to correspond with trend line support, as shown on the chart.

chart courtesy of Mastertrader.com

Tip: A BS on trend line and horizontal support, that is also a Guerrilla^TM Long Setup, is a more powerful combination suggesting a tradable bounce once the bulls regain control of the stock.

The Play: Buy over the high made during the first 30 minutes of trading (as the previous day's high is too far away), with a protective stop under the lower of the day’s low or yesterday’s low. [NOTE: Because of the Long Guerrilla^TM Setup, the Trading Strategy is valid for two trading days.]

Objective: A move to the $25.00 area. MEDIUM RISK

Play Review:

OVTI reached a high of $28.50 after five up days. Best results were achieved using trailing stops.