Now that financial stocks have taken a breather and pulled back, is it time to re-enter those leaders on a constructive bounce off the 50-day, or are you catching a falling knife?
To discern between the two, take a close look at the stock’s volume.
Ideally, volume should be light on the pullbacks, and then it should kick-in as the stock rebounds to the upside.
However, if volume is heavy on the decline and light on the rally attempt, then its support may be short-lived.