I received an email from a reader who asked if today’s pullback in SNCR was an entry signal. My answer was a not so subtle, “Not on your life!”
In last night’s chart post, I mentioned that I liked SNCR on a pullback. Those that have been reading me for some time know that I only enter low volume pullbacks that gradually pullback to support.
What we had today was a high volume move with a long negative bar that “engulfed the previous day’s smaller postive bar”. In Japanese candlesticking vernacular, this is called a bearish engulfing pattern. Of course, as it sounds, this a bearish signal.
What we want to see is an orderly pullback to support that takes a few days to develop. While a big down day like today does not take SNCR off the watchlist, it certainly pushes it down to the secondary watchlist.