GoodRX (GDRX) is a company that helps people buy prescription drugs cheaper. We are interested in the potential implied by the price chart, and not so much the fundamentals since our swing trade strategy is short term oriented.
What makes this chart compelling is the very broad double bottom formation along with the recent price action. The fact that price is revisiting a previous low offers an attractive location since buyers are likely to step in here again.
The price action is has established a bullish pin bar, and when that comes along within a double bottom, now we have one form of confirmation of actual buying.
From this information we can define the reward/risk and entry. The trade becomes active once the buy stop is taken out. We set the buy stop above the entry candle to make the market work a little harder to prove its strength.
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Here’s the swing trade idea:
Buy Stop: 38
Stop Loss: 34
Target 1: 42
Target 2: 46
Target 3: 50
Keep in mind it is important to WAIT for the market to reach the buy stop before entering. This helps to reduce getting caught in price noise.
If you are new to trading, then it would be best to paper trade this idea to get a feel for how our swing trade strategy works.
*This is for educational purposes only. Please read our full disclaimer HERE.
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