Buy A Bounce

Stock prices bounce around all the time, but a “buy a bounce” strategy involves buying a particular security once the price falls toward a certain level of “support.”

Support refers to examining past trading patterns using the high and low price of a security over a specific timeframe, usually between 50-200 days. The support level is then determined from the lowest daily price in this timeframe.

So when the price reaches (bounces off) this support line, it’s at least theoretically time to buy, since there is an expected increase from the low support level.

Bounce. Like Silly Putty.