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system
if a trendline or pattern breaks due to some bad news but it returns back what to do?
user
there is a technique called the elliott wave which explains these 'shocks'. the reversal directions you are questioning are part of the pattern, it is known as corrections. the elliott wave is an indicator based on psychology of investors. think about it this way, if you see a huge up trend what are you most likely to do, sell and make profit or continue, this is why there is a shock before it continues. many people will sell to be safe, especially after hearing the bad news they won't risk it. by learning the elliott wave you'll be able to make an educated decision on whether or not to stay or leave. here are websites on the elliott wave: http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:elliott_wave_theory http://www.swing-trade-stocks.com/elliott-wave.html the elliott wave is helpful in any time frame and works well with momentum. hope this helps.
assistant