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*A decline in price and a base (even if its a short one): A stock or commodity that has experienced a meaningful decline and is now consolidating and trading sideways in a range.
* A rising Oscillator indicator: Ideally, the last four trading days will be above their respective levels of 10 trading days prior.
* A bullish MACD indicator: that means that the Fast line is above the Slow line (i.e., the MACD histogram is above 0).
* The 28-day Rate-of-Change is bullish: The 28-day rate-of-change is above its own 28-day moving average
* The RSI Index shows a bullish divergence from price: Ideally the 3-day version of RSI will be displaying a bullish divergence from the market itself i.e., some higher lows for RSI while the market is sideways or down.
-Dr Brett's Profiting From Short-Term Momentum: A Best Practice in Trading. He has recently written a series on Best Practice in Trading. Check out the rest of his posts as well.