Turbo Trading's Head Trader Robert Knight, MBA, made this video for traders called "First Pull Back Entry Opp Explained." He used $NES (Nuverra Environmental Solutions Inc.) as an example on 1/3/2022. A transcript appears below this video.
This is a video on first pull back entry opp, and the stock is NES. We had it on the watch list over the weekend. It normally doesn't trade much range. And if it does, it tends to be a one-day wonder. But on Thursday - Friday, it had a strong move and then today it did trade to 4.50, but let's look at it from an opportunity to have a traded at this morning.
It had moved up slightly in the pre-market. And there you had a resistance level, I suppose, of around 3.15. At the opening, it spiked right up, so it didn't really get a chance to take it. So what you're looking for is to buy the first pullback.
So we've got these three red candles down. You get a bit of a capitulation -- sells off. This next candle is green. So what you're looking for is the first green candle to make a new high. So this is the first green candle, but you want to make the next candle to make a new high. So here was your breakout level here at around 3.37, 3.35 and it closed above that.
So this was your entry in here. You take this at the 3.35, 3.40 level on the first pullback entry up and sure enough, boom off it went and it added a dollar from that level.
So this is a key. This is one of the things we're always watching for when these stocks spike at the opening. I don't normally trade these at the opening. I usually wait five or 10 minutes because, if you had to chase this and it spiked up... if you ever got in it at 3.50 and then all of a sudden it sells off sharply and you get whipped out. So you want to watch for that. This is what most of the...experienced traders are waiting for. They're waiting for this first pullback. Sometimes you don't get it. And if you don't get it, then you're not in the trade, but it's better than getting whipped out of the stock. So first green candle to make a new high: that's your entry-level first pullback. And away it went.