{"id":6768,"date":"2020-06-23T12:25:50","date_gmt":"2020-06-23T16:25:50","guid":{"rendered":"https:\/\/morpheustrading.com\/blog\/?p=6768"},"modified":"2022-04-06T15:04:56","modified_gmt":"2022-04-06T19:04:56","slug":"pullback-buying","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/pullback-buying\/","title":{"rendered":"3 Hot Stocks to Buy on a Pullback (and how to know when)"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"892\" height=\"735\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/SHOPpullback.png\" alt=\"Shopify pullback\" class=\"wp-image-6814\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/SHOPpullback-110x91.png 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/SHOPpullback-300x247.png 300w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/SHOPpullback-768x633.png 768w\" sizes=\"auto, (max-width: 892px) 100vw, 892px\" \/><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">TABLE OF CONTENTS<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/morpheustrading.com\/blog\/pullback-buying\/#When_top_stocks_are_too_extended_for_low-risk_entry_a_stellar_pullback_buying_opportunity_may_be_just_around_the_corner_Heres_a_simple_way_to_know_when_to_buy_a_pullback_along_with_three_hot_stocks_to_put_on_your_pullback_watchlist_now\" >When top stocks are too extended for low-risk entry, a stellar pullback buying opportunity may be just around the corner. Here&#8217;s a simple way to know when to buy a pullback, along with three hot stocks to put on your pullback watchlist now.<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/morpheustrading.com\/blog\/pullback-buying\/#Why_pullbacks_are_prosperous\" >Why pullbacks are prosperous<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/morpheustrading.com\/blog\/pullback-buying\/#How_to_buy_leading_stocks_on_a_pullback\" >How to buy leading stocks on a pullback<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/morpheustrading.com\/blog\/pullback-buying\/#Three_leading_stocks_to_monitor_for_pullback_entry_now\" >Three leading stocks to monitor for pullback entry now:<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/morpheustrading.com\/blog\/pullback-buying\/#1_Okta_OKTA\" >1. Okta ($OKTA)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/morpheustrading.com\/blog\/pullback-buying\/#2_Shopify_SHOP\" >2. Shopify ($SHOP)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/morpheustrading.com\/blog\/pullback-buying\/#3_Twilio_TWLO\" >3. Twilio ($TWLO)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/morpheustrading.com\/blog\/pullback-buying\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_top_stocks_are_too_extended_for_low-risk_entry_a_stellar_pullback_buying_opportunity_may_be_just_around_the_corner_Heres_a_simple_way_to_know_when_to_buy_a_pullback_along_with_three_hot_stocks_to_put_on_your_pullback_watchlist_now\"><\/span>When top stocks are too extended for low-risk entry, a stellar pullback buying opportunity may be just around the corner. Here&#8217;s a simple way to know when to buy a pullback, along with three hot stocks to put on your pullback watchlist now.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_pullbacks_are_prosperous\"><\/span><br \/>Why pullbacks are prosperous<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>During any significant market rally, the first stocks that break out to new highs and move substantially higher within a short period of time are known as <em>leading stocks&#8211;<\/em>because their price action leads the market higher.  <\/p>\n\n\n\n<p>Since stocks do not go up in a straight line forever, these leading stocks eventually lose momentum and go into a corrective phase to digest recent gains.  <\/p>\n\n\n\n<p>As they do, traders begin to lose interest and those powerful stocks get removed from watchlists, in favor of different stocks that are now positioned to move higher. <\/p>\n\n\n\n<p>But even though trader interest in leadership stocks usually fades after a few weeks of lower to sideways action, <em>this is exactly when these stocks should be monitored for a lower-risk entry point.<\/em><\/p>\n\n\n\n<p>Although on a pullback, these stocks are <em>still leaders<\/em> and money will eventually rotate back in! <\/p>\n\n\n\n<p>Continue reading to discover our easy method for knowing exactly when to buy these top stocks on a pullback.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_buy_leading_stocks_on_a_pullback\"><\/span>How to buy leading stocks on a pullback<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>So how do we know exactly when to enter a leading stock on a pullback? Like the rest of our swing trading strategy, our method is <em>simple, yet highly effective.<\/em><\/p>\n\n\n\n<p>We track leading stocks pulling back by waiting for the <strong>first touch of the 10-week moving average (on a weekly chart) as a signal <\/strong>to get ready to buy. <\/p>\n\n\n\n<p>Note that not <em>all<\/em> pullbacks of  leading stocks are buyable. <\/p>\n\n\n\n<p>Some pullbacks are too violent and\/or may violate the 10-week MA by more than 5%. We pass on these pullback entries.<\/p>\n\n\n\n<p>After finding a leading stock that has pulled back to its 10-week MA, we next drill down to the shorter-term <em>daily<\/em> chart time frame.<\/p>\n\n\n\n<p>The weekly chart shows us the &#8220;big picture&#8221; of the trend, while the daily chart helps us determine a precise, low-risk entry point. <\/p>\n\n\n\n<p>Specifically, we fine tune our entry point by <strong>using the daily <\/strong><a rel=\"noreferrer noopener\" aria-label=\"candlestick charts (opens in a new tab)\" href=\"https:\/\/school.stockcharts.com\/doku.php?id=chart_analysis:candlestick_pattern_dictionary\" target=\"_blank\"><strong>candlestick charts<\/strong><\/a><strong> to look for some type of bullish reversal day: <\/strong>hammers, gap-down reversals, and bullish engulfing candles all provide fantastic buy signals.<\/p>\n\n\n\n<p>After identifying a bullish reversal pattern, we then list the setup in our nightly <strong><a href=\"https:\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"swing trading report (opens in a new tab)\">swing trading report<\/a><\/strong> to buy on strength <em>or <\/em>wait for a short-term pullback to enter.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Three_leading_stocks_to_monitor_for_pullback_entry_now\"><\/span>Three leading stocks to monitor for pullback entry now:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Okta_OKTA\"><\/span><br \/>1. Okta ($OKTA)<br \/><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"892\" height=\"735\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/OKTA.png\" alt=\"\" class=\"wp-image-6784\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/OKTA-110x91.png 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/OKTA-300x247.png 300w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/OKTA-768x633.png 768w\" sizes=\"auto, (max-width: 892px) 100vw, 892px\" \/><figcaption>Weekly chart of $OKTA<\/figcaption><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Shopify_SHOP\"><\/span>2. Shopify ($SHOP)<br \/><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"892\" height=\"735\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/SHOP2.png\" alt=\"\" class=\"wp-image-6786\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/SHOP2-110x91.png 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/SHOP2-300x247.png 300w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/SHOP2-768x633.png 768w\" sizes=\"auto, (max-width: 892px) 100vw, 892px\" \/><figcaption><em>Weekly chart of $SHOP<\/em><\/figcaption><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Twilio_TWLO\"><\/span>3. Twilio ($TWLO)<br \/><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"892\" height=\"735\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/TWLO.png\" alt=\"\" class=\"wp-image-6788\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/TWLO-110x91.png 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/TWLO-300x247.png 300w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/06\/TWLO-768x633.png 768w\" sizes=\"auto, (max-width: 892px) 100vw, 892px\" \/><figcaption><em>Weekly chart of $TWLO<\/em><\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It can be tempting to chase fast-moving stocks as they rip to new highs, but don&#8217;t give in to temptation.<\/p>\n\n\n\n<p><em>If you missed the proper base breakout entry, simply wait for a pullback to the 10-week moving average on the weekly chart, then drill down to the daily chart to hone your entry with a bullish reversal candlestick.<\/em><\/p>\n\n\n\n<p>Most of the big winners remain in strong uptrends for many months, so don&#8217;t feel like you&#8217;ve missed your big opportunity.<\/p>\n\n\n\n<p>To be notified of our exact entries, stops, and target prices for leading stocks that we buy on a pullback, <a rel=\"noreferrer noopener\" aria-label=\"sign up now (opens in a new tab)\" href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\"><strong>sign up now<\/strong><\/a> for your subscription to <em>The Wagner Daily<\/em> report.<\/p>\n\n\n\n<p>As always, remember to <em>trade what you see, not what you think!<\/em><\/p>\n\n\n\n\n","protected":false},"excerpt":{"rendered":"<p>When top stocks are too extended for low-risk entry, a stellar pullback buying opportunity may be just around the corner. Here&#8217;s a simple way to know when to buy a pullback, along with three hot stocks to put on your pullback watchlist now. Why pullbacks are prosperous During any significant market rally, the first stocks [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[3],"tags":[],"class_list":["post-6768","post","type-post","status-publish","format-standard","hentry","category-stock-trading-strategy"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/6768","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=6768"}],"version-history":[{"count":16,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/6768\/revisions"}],"predecessor-version":[{"id":11160,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/6768\/revisions\/11160"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=6768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=6768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=6768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}