Here is a post-mortem on the NOW trade today. As always, when price had gone up above 20-30% in just one day, you must be vigilant and take bearish signals on the minutes chart very seriously. Reliable signals include volume, RSI or EMA crossovers.
For NOW, the FIRST sell signal was the bearish volume divergence. Price made a higher high while volume dropped in the 3 minute chart, thus less volume is fueling the rise and price is likely to falter.
The SECOND sell signal was the bearish candlestick from the peak.
The THIRD signal to SELL was the RSI forming lower highs and then the RSI paraburst.
The LAST signal to SELL was the EMA bearish crossover.
The FIRST and SECOND sell signals would have been enough reason to sell since the price had gone up considerably and the bearish signals are likely to be reliable .
Had you followed these sell signals , you would have been out of the trade with profit or with little loss.
Let’s look at the minutes pattern.
Here’s how jockeys use fear and greed in fast plays like NOW. Notice how volumes increase significantly on pushes . See the brokers time/sales and see that only 1 broker is responsible for the push up every single push. Then he passes the baton to someone else. Each push takes 5 minutes, tops. Notice how brokers buy huge volumes quickly within seconds, to encourage you to chase, causing the price to surge. They are preying on your greed, and your fear of missing out. Then a consolidation happens, for 13 to 15 minutes. Why do people not buy at this time? It’s because there seems to be no scarcity of shares. It is part of human survival instinct to want something that is scarce more badly than something that is abundant. So when demand dies down, people don’t try to buy more, they sell to whoever is willing to buy. Then when a next surge happens, people start chasing again. That primal instinct to survive, to be better, to win. Each succeeding rise becomes stronger than the former until a climax is reached. The stock is sold down,also within seconds. and some people hold this time, after the jockeys have rewarded their loyalty in the past few push ups. People are conditioned to hold, but this time it is time to sell. Perhaps in denial, people hold or add more as the price drops at 2:30 pm. They are momentarily proven right when the price bounces. Just as they feel like total geniuses for holding, their pride gets smashed with a sell down once again until the close.