Not all stocks move in huge increments. Take Bitauto Holdings (BITA), an online content provider in China for the automotive industry, for example. I featured it in my May 21st subscriber update with a $38.89 buy point as it formed a double-bottom chart pattern.

The stock broke out in big volume on May 22nd (the next day), but felt the need to retest my buy point at the beginning of June. Retests among breakout stocks are nothing new, of course, but what made Bitauto’s retest different is that it formed an inverted hammer reversal candlestick on June 4th, signifying the retest wasn’t likely to last for long.

Sure enough, on June 5th, the stock sprang higher, initiating a move that through August 8th would take it 61% higher. Here, take a look:

It pays to stick to winners when trading stocks– especially when they’re well off their highs, as was the case with Bitauto. But it also pays to spot double bottom and candlestick reversal chart patterns, because they tell you when to buy and keep you from selling a winner too soon.

I welcome your comments.

–pj