Large Base On Heavily Shorted Basic Energy Services (BAS) – 60% Pop Incoming? (Video)

Bill O' Neal, founder of Investor's Business Daily, always had a special fondness for big basing patterns on stocks.  He constantly looked for "cup and handle patterns."  That is, when a stock, which was dormant for a long period of time, makes a rounded bottom (the cup) before breaking out.  This breakout is often met with increased selling, which sends the stock back down for a brief period (handle).  Then, a surge of buyers enthusiastically rush in, which makes the dormant stock suddenly burst upward.  This is exactly what I'm seeing in Basic Energy Service's stock.

http://s10.postimage.org/v55n4ex9l/BAS_Base.jpg

In addition to the bullish base and breakout in the stock, the sentiment on the stock is decisively bearish.  This suggests that, if the stock begins to rise, a short squeeze could accelerate the climb many fold.  For the full video analysis of the stock, click here.  Make sure to view in 720p for best viewing experience!

Profile photo of MetroTraderMetrotrader (D) is one of the few practicing CMTs (Chartered Market Technicians) in the United States . The CMT certifies his knowledge of market timing and risk management approaches. He tends to look for broad market moves and take advantage of them with index funds. The strategy he principally uses is mostly quantitative, and, tested, and has avoided or capitalized on every major recession since the 1940s. He says the best way to make money is to avoid losing it in the first place.

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