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One Way to Know When Buyers May Return

Back in December, I alerted you to a digital currency I was watching.

That digital currency is called Polygon, and it trades with the symbol MATIC.

As a disclaimer, I told you that I knew nothing about the coin or the MATIC network.

This idea was based on the timeless supply/demand approach to trading.

I have consistently tried to remind you that the stock market is basically just an auction.

And like any auction, it operates on the principles of supply and demand.

This strategy has served me well over the years…

And below, you can see how the technical setup looked on the chart at that time.

It was setting up in a textbook compression pattern that looked primed for a breakout based on supply and demand dynamics.

 Daily Chart of Polygon (MATIC) from December — Source: TradingView

But it didn’t break out.

In fact, it cratered.

Current Weekly Chart of Polygon (MATIC) — Source: TradingView

It wasn’t alone. The entire digital currency world took a hit in December and January.

Even the big names like BTC and Ethereum fell 50% or more.

Needless to say, if you bought it, you got stopped out.

You are using stops, right?

Finding a Safe Re-Entry Point

Once a market corrects, you want to find the turning point that says it’s safe to get back in.

William O’Neil, investment pioneer and founder of Investor’s Business Daily, came up with the “follow through day” to signal when it was time to get back in.

And MATIC just gave us one.

Current Daily Chart of Polygon (MATIC) — Source: TradingView

I won’t go into the specific rules of follow through days in this post.

However, the idea is that you want to see a big move higher on increased volume at least four days after an attempted rally.

Is it guaranteed to work?

No. Nothing is.

But it is a good sign that buyers have come back to the table.

And as regular readers know, buying is what turns bear markets into bull markets.

Embrace the surge,

Ross Givens

Ross Givens
Ross Givens

I bought my first stock when I was 12 years old. It was Microsoft. I’ve been a registered financial advisor. I’ve worked as a stock broker. I ran a managed fund. I was a Vice President at JP Morgan with Series 7, Series 66 and Series 3 securities licenses. I’ve been featured on Fox Business, CNBC, Bloomberg, and a bunch of other networks. The only thing I enjoy more than making money, is helping YOU make money.

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