In which case, it is not the time to enter a bullish position.
These events, while happening outside of the chart, so to speak, will appear over several sessions and initially will seem much like a pullback.
The positive earnings, however, are a fundamental signal that suggests that the stock will resume its uptrend.
Most pullbacks involve a security’s price moving to an area of technical support, such as a moving average or pivot point, before resuming their uptrend.
For this reason, traders use moving averages, trendlines and trading bands to flag when a pullback keeps going and is at risk of entering reversal territory.
The biggest limitation to trading pullbacks is that a pullback could be the start of a true reversal.The A group represents 10 to 20% by number of items, and 50 to 70% by projected dollar volume.