Stockradar offers a sneak preview of how one of our 4 entry signals the Spike Reversal works on the ILU chart which last week sparked an immediate 20% rally. The Spike Reversal is a snap change in sentiment usually in response to already building demand pressures and is a signal to enter a stock at a relatively low price point in response to a sudden change in a stocks demand profile. NHC is one of our most recent successes with this price pattern. (See our Top Ten) The twice tested low at $3.00 is our first clue on the ILU chart and post the second test what followed was one week’s price action that dipped low into the support at $3.00 and then reversed up to close on its highs for the week, and above at least 7 prior weekly closes, on extraordinarily high volume which easily satisfies our criteria for a Spike Reversal (See Glossary). The following rally endorses this reversing price action as ILU quickly takes on the challenge supported by this fresh wave of demand to pressure resistance provided by the most recent high at $4.75. This allows us to move our stop loss immediately to break even at $3.90, a key step in managing the trade, as this new trend begins to unfold. ILU has broken many hearts over recent years and the rally should be treated like any other – with caution and appropriate protection. Trend Intensity jumps to a rating of 7 from a maximum possible rating of 10 confirming the reversal status.

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