Make More Money: The Art of Buying Pullbacks
Pullbacks are a money printer. Learn how to buy them.
A good pullback reminds me of a slingshot.
Before a slingshot launches forward, it has to be pulled back first. That backwards tension is what creates the power for the next move higher.
I’d argue that in a hot market like we’re in right now, there is almost no buying strategy that is needed more than buying a pullback. In a market like this, you likely won’t get major drawdowns to buy.
Because of that, you need to know where and how stocks will pull back into key levels.
One of the most important skills you can develop as a trader is knowing the difference between buying a pullback and buying a falling knife. They can definitely look similar in real time because both involve a stock coming down from a high, but they’re actually very different.
Pullbacks offer some of the highest reward setups if you know how to buy them…
I want to quickly mention that last week, I published my second shortage + bottleneck article here.
It’s starting to pick up steam and momentum, and many of the names are starting to see some movement. Yet I don’t think the trade is over, by any means. It still feels early…
In this one I discussed what I believe to be the next major AI bottleneck, my thesis, the names within the shortage + bottleneck, and I even highlighted which names I already own and which ones I was looking to buy.
If you recall, back on March 22nd I published an article titled “The Next AI Bottleneck” linked here.
In this article, I went in depth on why I believed the CPU trade was about to take off. I highlighted five CPU stocks I thought were set to benefit, and I’d say they played out pretty well.
INTC: $44 → $100 (+127%) (Alerted buy to subscribers at $39x on 1/6)
AMKR: $45 → $78 (+73%)
AMD: $202 → $350 (+73%)
ARM: $143 → $235 (+64%) (Alerted buy to subscribers at $140x on 4/7)
QCOM: $130 → $180 (+38%)
Not bad for just over a month.
I’m also working on my updated AI Power + Grid + Energy primer and expect to have it released within the next week or so, be on the lookout for that. I’m already positioned in a few of these, but the charts tell me there’s more coming.
In the remainder of this article I’m going to discuss how you can get buy and get positioned in stocks in the midst of a pullback, what to look for when determining if it’s a “normal” pullback or the end of a trend, how to stop buying falling knives, and much more.
In a trend like this, it’s more important than ever to know how to buy.
I think this will help with that.