๐งต The Undercut & Rally โ the setup most traders sell. Smart traders BUY.

1/ Stock drops below a key low. Panic. Stops hit. Shorts pile in.
Then it snaps back above.
That's the U&R. ๐งต
2/ Why it works:
Prior lows = clustered stops. Price dips below โ stops trigger โ sellers exhausted. Shorts trapped. Their covering fuels the rally. ๐
3/ Two entries:
โธ Same-day: undercuts low, closes back above โ buy reclaim โธ Next-day: sells off hard, gaps up next morning โ buy open
Daily chart. Closing basis.
4/ Rules:
โ
Price reclaims prior low โ BUY
โ
Stop: 1% below undercut wick
โ
Target: prior swing high
Tight stop. Big R:R. Size up.
5/ Volume tell:
๐ Low volume undercut = no sellers = bullish ๐ High volume undercut + next-day gap = capitulation = explosive
6/ The MAUR โ Moving Average Undercut & Rally.
Stock undercuts the 10/21/50/200 MA. Reclaims it.
Same stop rule: 1% below the wick. โก
7/ MAUR by level:
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