How does a stock prepares for a rally (bullish/bearish)? Here is an example of a bull rally. A base is formed which was held for a long time. Also price consolidated in a small price band. Then 50 DMA gave an upward cross on 200 DMA (Golden cross). Price broke out of the narrow range and rallied to make higher highs and higher lows.
What to do now? If one likes to go long, one may have a small SL. Because this stock has given a good run up. Smart traders may wait for a consolidation. That will give them steam to continue the rally.
What to do now? If one likes to go long, one may have a small SL. Because this stock has given a good run up. Smart traders may wait for a consolidation. That will give them steam to continue the rally.