It works in reverse but not as predictably, if the timeframe for a decline is compressed, the trader hasn't forgotten the infatuation they had when the stock was a high-flyer and they go back to it.
On the other hand, if the decline drags out the trader won't touch anything less than gilt-edged paper, forsaking all others . (and maybe cutting deals with God,"if he can just get back to even")
On September 27 we said:
...Here's the 12-month chart, $30 looks like decent support:Yesterday the stock closed at $30.12 after trading as low as $30.03.
The stock traded as low as $31.41 yesterday before closing at $34.56.
In late premarket action the stock is up $2.39 at $36.95
With the broader market at it's lows for the day (DJIA down 233, S&P down 21) we just might have a hell of a short covering rally coming up for the big dogs.
Here's today's action in MCP, it opened on a gap up, revisited the daily low and is currently up 1.07 at $31.19: