TIP - One of the interesting facets of the Money Flow Index indicator (MFI) is that it can often identify an upcoming pop. The MFI is a momentum indicator that measures the flow of money into and out of a stock over a specified period, incorporating both price and volume data. Take note of the following image and specficially the MFI pattern just prior to "JUN" on the chart. The MFI will show a near vertical drop below the 20 level, often reaching 0, make a sharp pivot, turn up, and take off after clearing the 40 level. Why does it drop like that? Well most likley the large and medium sized buyers are done buying so the volume drops off and the price makes a short lived dip. The angle of any indicator line and the sharpness of it's pivot, including the MFI, reveals trader sentiment and risk tolerance in the moment. The steeper the line and the sharper the pivot, the more risk-on and aggressive the traders are with the stock. If you see arcs in the pivots, traders are being less aggressive or they are manuvering for bullish W and double bottom patterns. Give the MFI a try via paper trading first and watch for those near vertical drops, super sharp pivots, and the break above 40 and see if it does not result in a price pop. Happy Trading - TIP
