Strategy Description: RLYP had bad news yesterday, bad news premarket, and is pretty beaten down on the daily chart.
I was short biased looking to short pops originally given the premarket weakness and the key levels that were being breached. But trades like these it's important to let the price action tell you what's going on, and if counter-trend trading with small size be very selective on prices.
In this case the signal of true strength was when it began holding above the opening high. While initiating the position on the reclaim of the lows and then vwap, at that point you should still be quite light with a wide stop-loss. However the adds come as it begins to hold new highs. and you can put on size as a momentum lot (meaning that some has to be taken off pretty quick).
The typical pattern for these stocks that seem like pieces of trash are that they will gap down, trend up, squeeze out and then resume the downtrend. That's why it's so important to get some size off into up moves.
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