In football, when a team wants to take a shot down the field, they often have their top receiver run a “double move” route. The receiver blows off the line, hesitates and goes sideways a few steps to get the defender to “bite”, then turns up field quickly before the defender can recover leaving himself wide open for the bomb. Explosive stocks do the same thing.
Simply put, the “Double Move” set up is when a stock shows a strong move ( gap up or strong igniting candle ) on high volume followed by an orderly pull back on low volume as profit taking occurs. The pull back usually takes a little time to either find the bottom of the gap up candle or the 20ema. At this point the stock is poised to rip higher. Here are 3 examples of the “Double Move”
MELI: The stock explodes in early August ( first move ) then has a 3 week sideways pull back on low volume to the 20ema, then explodes again ( second move). That pull back to the 20ema is a perfect place to get long. MELI going higher.
$BABA showed basically the same thing. Gap up; pull back to the base of the igniting candle; then up again. Then it had a second gap up, followed by a pull back to the 20ema which closed the gap, then gone again.
$BREW Dubbed by me as the “King of the Double Move” after showing multiple repetitions of the same double move pattern over the past 6 months
The “Double Move” is an explosive pattern and one you should look for. Many platforms allow you to screen for gap ups. Use your screener to look for them. Rather than chase the igniting candle, load your bazooka and patiently wait for a gentle pull back on low volume. If price reaches either the 20ema or gap support at the bottom of the gap up candle, that is your cue to get long with a stop just below the 20ema or bottom of the gap.
