The market is always changing.
And right now, it seems all stocks are becoming too crowded. With these very crowded trades, it’s tough to predict when and how they’re going to drop. And when it drops, is it a fake-out, or is it a fake breakout?
When we see stocks being overcrowded, it’s best to avoid shorting these kinds of stocks and look to go long instead. The reason for this is because when you have overcrowded stocks they tend to form a continuation pattern of upside momentum.
TONS OF STOCK EXAMPLES
There are tons of stocks that we could use as examples such as $GENE, $MTSL, $CLAI, or $BLIN, where the stocks are either choppy and not that overextended or trading high volume but not bouncing back. These are some of the consequences of an overcrowded stock.