COPY This SIMPLE 6-Rule Trading Strategy For HUGE Moves

Overview

Connor Bates describes a momentum-focused swing- and position-trading system for finding and trading stocks with the potential for unusually large moves. The approach combines price and volume behavior, liquidity, industry-group strength, market themes, and catalysts.

Bates emphasizes that traders may take many small losses before catching a large winner. In his view, discipline and selectivity matter more than predicting how far a stock will rise.

Six Criteria for Selecting “Super Stocks”

1. A large base: Look for a substantial daily or weekly consolidation before a breakout. Bates argues that long bases can reflect supply being absorbed and may precede larger advances.
2. Linear price action: Favor stocks that trend relatively steadily over weeks or months rather than repeatedly reverting to their average.
3. Liquidity: His stated screen is roughly $80 million or more in average daily dollar volume. He says the threshold depends on account size.
4. High volatility: Prefer an average true range (ATR) of at least 5%, so the stock has room to make meaningful moves. Position size should reflect the greater volatility.
5. A strong industry group and market theme: Look for several stocks in the same group showing strength, and identify the broader market narrative—for example, AI-related memory or energy demand.
6. A catalyst and a favorable market reaction: Catalysts may include earnings, guidance, partnerships, or other news. The reaction matters: a weak response may indicate that expectations were already priced in or that investors doubt the outlook.

Entry Setups

• Base breakout: Buy as a stock clears a well-defined consolidation. A tight area beneath resistance can provide a nearby stop. If the breakout fails and price falls back into the base, the setup may not be ready.
• Continuation flag or high-tight flag: After a strong advance, look for a relatively orderly consolidation and renewed breakout. Bates describes a high-tight flag following a move of roughly 100% over several weeks. He says a pullback can exceed 20% and still form a flag, depending on the stock’s structure. Breakout volume can provide confirmation.
• Pullback to rising moving averages: Consider an orderly retreat to a rising moving average rather than buying a sharp “falling knife.” The discussion covers the 10-, 21-, 50-, and 200-day averages, as well as weekly equivalents, including the 10-, 30-, and 40-week averages. It equates the 10-week, 30-week, and 40-week averages with roughly the 50-, 150-, and 200-day averages.
• Episodic pivot or earnings gap: After a significant catalyst—often earnings—consider an opening-range breakout. One example is buying above the first five-minute range and using the day’s low as a stop. Bates favors gaps with unusually high volume and immediate follow-through.
• Undercut-and-rally or relative-strength entry: When the market is weak, watch for a stock that holds up better than its index or peers, then reclaims a key prior level. The proposed entry is near that reclaim, with a stop below the local turning point.

Bates presents these as opportunities that may appear at different stages of a stock’s trend cycle, rather than requiring traders to buy only at the initial breakout.

Risk Management and Exits

• Keep losses small and size positions according to volatility and the distance to the stop.
• Bates says the win rate may be around 30%–50%, depending on market conditions. The strategy expects multiple small losses to be offset by a small number of large winners.
• He says the first three to five days can be a strong period for a new move and may be a time to sell some shares into strength.
• One simple exit rule he offers for newer traders is to sell half on the first daily close below the 10-day moving average, then manage the rest using support or a moving average.
• A stock reaching about 10 ATR above its 50-day moving average may be extremely extended and at greater risk of a pullback. This is not a guarantee of a reversal.
• Follow the trend rather than selling solely because a stock appears expensive or extended. If the trend breaks or the stock’s character changes, reduce or exit.
• Market conditions matter. Bates says the setups tend to work better when the Nasdaq/QQQ is above a rising 21-day EMA or 50-day moving average. Weak or range-bound markets offer fewer leaders.

Examples and Market Context

These are examples Bates discusses, not independent verification of the trades or performance.

• SanDisk (SNDK): Presented as a memory and AI-infrastructure leader with a large base and strong group confirmation from Western Digital (WDC), Seagate (STX), and Micron (MU). Bates says he bought around $135 and describes moves from roughly $60 to $725 over a couple of months, as well as subsequent breakout and pullback opportunities. He also mentions Nvidia (NVDA) as an example of a liquid institutional leader.
• Rocket Lab (RKLB): Used to illustrate a multi-year base, rising volume, and a catalyst-driven move tied in the discussion to a U.S. space executive order and speculation about a potential SpaceX IPO. Bates describes a move of roughly 60%–70% from an entry area and another move of about 30% in a few days. He mentions a possible support area near $74 and an average daily range around 10%. These figures and catalyst descriptions are as stated in the subtitles.
• Planet Labs (PL): Discussed as a space-themed earnings-gap example, with reported record volume and improving free cash flow and backlog. The transcript describes a move from roughly $2 to $18 and a later five-minute opening-range entry; the exact figures are difficult to verify from the subtitles.
• Bloom Energy (BE): Presented as a long-base, catalyst-driven example, with reported 30% short interest. The discussion cites an American Electric Power gigawatt-scale deal followed by a roughly 60% move on exceptionally high volume, and a later Oracle partnership associated with a roughly 22% rise. The subtitle wording around volume comparisons is garbled.
• Thematic and speculative groups: Quantum names include IonQ (IONQ), Rigetti Computing (RGTI), D-Wave Quantum (QBTS), and Quantum Computing Inc. (QUBT). Other examples include Oklo (OKLO) and GE Vernova (GEV) in AI-related energy, and the rare-earth names MP Materials (MP), USA Rare Earth (USAR), Critical Metals (CRML), U.S. Antimony (UAMY), and TMC. Bates notes that speculative, unprofitable thematic stocks can move quickly, but their trends may be less durable.
• Other stocks mentioned: MSTR and SMCI are cited in a discussion of sudden high-beta moves.
• Commodities and related instruments: Bates discusses gold, silver, copper, platinum, and palladium. He describes gold’s long-term base and breakout, and notes that exposure could be taken through GLD, futures, options, or mining stocks. For gold, he cites a roughly 10-year base, a move beginning around early 2024, and an extension of about 12 ATR above the 50-day average before selling. He also describes silver as breaking out of a large base and highlights possible group confirmation from other metals.
• Energy sector: XLE is mentioned as a potential breakout from a long base.

Disclosures and Cautions

• The subtitles contain no explicit “not financial advice” disclaimer.
• The video includes promotional segments for NinjaTrader, Apex Trader Funding, and TradeZella, including discount or referral codes. It also promotes Chart Academy. These are promotions, not evidence of trading performance.
• Performance figures and trade examples are the guest’s reported examples and are not presented in the subtitles as audited results. Several numbers and phrases are unclear because of apparent auto-caption translation errors.

Presenters and Sources

Connor Bates is the guest. The Chart Fanatics host or hosts are not named in the subtitles.

The discussion references Jesse Livermore, William O’Neil and CAN SLIM, Dan Zanger (rendered in the subtitles as “Dan Sanger”), Pradeep, and Kristjan Kullamägi (whose name is rendered inconsistently in the subtitles).