hello guys steven here welcome to this youtube videos and today we're going to cover some of the basic method of how to really value support and i do see a lot of beginners making the same mistakes over and over again so in this video it's going to be very helpful for beginners to actually find the correct dip by strategies or breakout strategies as well on the second hand it's also going to help you to find the correct statistics you want to track so before i start this video make sure to click the like button and
subscribe let's get into the video so the first method you have to nerf on support is volume and the support has to combine with each other to form a solid ground for you to dip by so in this case i will actually give you an example of dlpn that happened last week to give you an idea of how to really look for support and also some of the terms you learn from books like 200-day moving average or 52-week highs or view apps these type of terms they don't usually work as a support so that's why
a lot of people tend to make the mistakes by using that type of price point as their support also as a risk level that's why they tend to take a lot of losses by using these terms so let's look at dlpn uh for the overall chart that the stock never performed a huge spike like last week and traded 160 million shares on the first screen day so when you are looking at the first screen day it's a very bullish sign and also it's very difficult to shorten to that's why most of the short squeezes happen
on the first green day now once we know that the momentum is driven upwards we want to find what's the correct support for us to either dip buy or to buy the breakouts or if you are shorting a ticker you want to know where you want to cover normally you want to cover right before the support so in this case you can have to know the boat side either long and short to figure out uh where is your target and also where is the short service target as well so for the charge dlpn you can
see that the stock consolidated between 15 to 17 for almost the entire day and when the stock tends to break out through that 20 area in the after hour majority of the people will use that support to buy the breakouts and you can see that the stock went from 19 to almost 40 dollars in the next day and it tried to test the 40 again and it went back to the 19 20 support and it's cracking very very slowly ever since that day what we can get from this chart is first of all that first
green day normally is the uptrending momentum when the stock tends to go red on the day that stock is tends to switch its momentum and going back to the support so in this case we have two different mindsets for long and short let's go over the long side as i said on the first point that volume and support has to combine with each other to actually form a solid ground for you to dip by so the more dense the volume that trades in that specific consolidation area the harder for the support to crack so in
this case dlpn traded a hundred million volume and the consolidation is pretty tight it's between 15 to 20 and once it breaks out in after hour that the stock tends to flip double of its price so for this specific case as i mentioned in the previous couple videos that the smaller the market cap is the higher the stock tends to go dlpn that has around 100 million market cap that's considered to be a very small market cap so the potential of the stock going higher is greater than gamestop gme so the first thing you want
to write down will be that the more volume that trades in the one specific consolidation area the more winning percentage you will have by deep buying from the support the second one you want to write down is if the stock is on the up trending momentum especially after the first screen day performs the breakout and it tends to go parabolic in after hour or into the second green day you want to memorize that if the market cap is really small from the beginning then you have a greater potential to get more reward from by did
buying or buying the breakout from the consolidation area so the second point on the cover will be dead buying strategies from the support in this case this is more about buying from the support after the stock tends to lose its massive momentum from the day high to the major support more of gme which i talked about previous couple of videos and that's a great opportunity did buying from a hundred dollar area for dlpn you can use that as well so the faster the drop is the more likely that stock tends to bounce from the major
support so let's try to use that method on dlpn so you can see that uh the stock went from uh 40 to 19 in one day you can see that the action of the chart is pretty slow that is slowly faded all the way back from 40 dollars to 19 but for gme it dropped 300 within an hour so that's not the normal action you get that as i said that the faster the drop is the more likely the stock tends to bounce so if the opn that performs the action went from 40 dollars to
19 in about 30 minutes or an hour this is the chance that you can dip by because you can see even the stock tends to fade all day it's still difficult for the stock tends to fade more after it hits the major support level so you can see that once they hit the support it's bouncing a little bit and it's also fading about maybe two percent three percent on each day and sometimes it tends to go up again so overall that two method you can learn first of all is the support has to consolidate with
a lot of volume the second point is when the stock is on the down trending momentum you want to aim for the fast drop you don't want to wait for the entire day after the stock already faded so those are the very two basic methods you can learn from deadline support and also try to value the correct support so that'll be all for this video uh leave a comment or question below if you want me to answer and that will be the end of this video thank you very much for watching i'll see you guys
in the next one [Music]
