top of page

How to Dip Buy the Trend $RNAZ Video and Transcription

What does it mean to buy the dip and trade the trend? How do you dip buy the trend? Head Trader at TurboTrading, Robert Knight, uses $RNAZ -- Transcode Therapeutics Inc -- as an example of "dip buy the trend." Watch this 6-minute video. A helpful transcript appears below.





We're going to do a video here on the concept of buying the dip, trading the trend. This is $RNAZ. It was a new issue done in for back in early July, popped a seven and then sold off and then declined. But today, well recently, yesterday was the start of the turnaround, but today's huge volume popped on news truck news or trial news on breast cancer I believe it was.


And the big spike, so from $2.75 to a high of $5.28, now $4.74. So, let's have a look at the trade here. And so, the strategy is to add to dips. Add, on dips in a rising channel or in a rising trade. And not the add if the stock, if it's a down-trending channel, then you're just adding liquidity for the sellers, giving them a place to sell to, and then you become the bag holder.


So, let's have a look at what that means. So, this morning, the stock popped and was in this rising channel like this.


And so, we did trade this. It was on our watch list. Entry is around $3.20. Pop too, $4, $4.25 area and then it backed off and it actually got whacked this huge engulfing bearish candle and started to, go down. So, you know, it's a bit too early, to give us any kind of trend.


This shook a lot of people out and I did say, especially when it bounced back up to resistance, that was the end of the trade. And from there, it did, it traded back to the high of the pre-market. We've just before the opening. So, there was an opportunity there may be to get back in, but you don't know, this could have just kept going, but it did turn around.


And so, when it did turn around, it gave you this new channel line. And we don't know if you know, I mean, this could have been the top of the channel here. But as in hindsight, this was probably the channel line, something like that. So it does now it, it started to trend. We can see, you can join the dots here and here.


When the stock double topped up here at this, high of the $4.40 doubles top to from there. So triple top gave you an indicator to sell because it failed to go and backed off, but you can see here, it holds the trend line. So, here's your dip buys. You could buy it here and here holds the trend line and off it goes.


And then it did break out through the $4.20 and popped up to close to the top of the channel. Pulled back now. It never did really get back to the trendline though. It did hold support on the 20 period, moving average, 15 period, moving average, which in this case is a strong, strong holder for it.


And so, all these spots you could dip by here and here and here and here. This doesn't really give you an opportunity to dip back Because you don't know if it's going, you know, its mid-channel, but it did stay in the trend. So, you stay in the trade because the trend is your friend. So here was your dip by areas here. This just says, no need to sell. You can let this run, but then it got up to this level here, the $5.26 and double, triple topped up there, and then boom got whacked.


And when it did get whacked. It broke down through the 20 period, moving average and out of this rising channel. Now it tried to get back up to it and fail. Now you can see that this 20 is, resistance for it, but it isn't a down trending channel. The key then is not the buy the dip because you don't know where the bottom is, this thing just, I mean, maybe you could have bought it here. How do you know that's going to run back up to $4.85, got up to the top of the channel?


This is a bearish, hammer-type gravestone pattern. Next Kendall's red. You need to get out of the trade. It's now forming a bear flag. So, do you buy the dip? Is this the dip that you buy? I wouldn't know because the trend is down and you just create, as I say, you're just creating liquidity for the bagholders up here.


This, this is a bear flag in here. This could, this isn't a down trending channel. You don't want to be buying stocks that are in a down-trending channel. It's pear flagging in here. Now it has made a little bit of a higher, low, but that doesn't mean it's not still in a down-trending channel. So, you want to trade the channels.


This is, trading up, failed here. Now it's trending down. So, no point buying the stock because this could trade down to $4.25, $4. Now if it pops in and breaks, out of this channel and goes through $5 and then maybe $5.25. Sure. Then it's back, then it's game on for the long side. But until it does you're trading against the trend.



 


Get a free trial of the TurboTrading Trader membership

bottom of page