Recapping past zones (March 28 2025)
A follow-up to our weekly zone alerts
Hi everyone and welcome to another Zone Update—where we track down past zone alerts to check how they’ve reacted after touching a key zone, and see what we can learn from it.
The past few weeks have been a real lesson in patience.
Patience not just in waiting for your setups to play out (our VRSN alert from late February finally paid off only yesterday)…
But patience also in terms of not losing your cool when a play falls apart right out of the gate. Like this one from our last alert:
But thankfully, not every setup requires patience. Some move a lot quicker than others—and we’ll be covering those today. Let’s get to it.
In case you’re new here, each week we highlight stocks nearing or entering Hot Zones, i.e. key levels on the charts with great risk-reward setups. Stay tuned and subscribe to get these alerts before anyone else!
Check out this week’s hot zones:
BWX Technologies Inc. (BWXT)
Industrials • Aerospace & Defense • USA • NYSE
Zone alert: March 12, 2025
This was an unexpected bonus alert, sparked by Citigroup’s sudden shilling of defense stocks—because “DOGE cuts fears are overblown” apparently.
So we fired up our scanner to hunt for stocks in that space, and BWXT quickly stood out.
At the time, it had just tapped the bottom of its May 2024 zone—a zone that has weathered retests fairly well over the past half-year.
It was also at an RSI level that, although not yet oversold, had aligned with where previous bounces happened.
Well the lesson here is that sometimes, the combination of zones + news can make for a ripper of a play.
The stock quickly rallied to the next zone above—going up by as much as 8% within ten days of the alert.
Antero Resources Corp. (AR)
Energy • Oil & Gas E&P • USA • NYSE
Zone alert: March 25, 2025
AR was a zone alert from just this past Tuesday, but the action that followed made it worthy of this premature recap.
We flagged AR for a number of reasons: the stock had just climbed 22% on fading volume, RSI was brushing up against overbought territory, and the R/R for this opportunity came in at 3.4:1, with the downside target set at the June 2024 zone.
The bounce occurred just a couple days after the alert—and it was sharp.
AR has already dropped about 3.5% as of writing, and it looks like there's still room to go. So far, so good.
Shake Shack Inc. (SHAK)
Consumer Cyclical • Restaurants • USA • NYSE
Zone alert: March 18, 2025
“…this bounce isn’t just a tease. Looking ahead, the stock might run into some mild turbulence around the $93 mark…
But if this setup turns out to be just as explosive as before, our eyes are set on the next key zone above, which is the June 2021 zone ($111-114)”
We featured SHAK in last week’s Zone Alert after it approached a zone that had, in past years, propelled it to some serious upside.
Paired with a pretty convincing bounce confirmation candle, it looked like a strong candidate to revisit the June 2021 zone—a potential 25% gain.
And to be fair, SHAK did bounce off its January 2021 zone—a near 10% gain since the alert. Not bad, all things considered.
But it wasn’t quite the moonshot we had our eyes on.
Midway through its climb, the stock suddenly found resistance. So what happened?
See, when we publish zone alerts, we usually use a Minimum Bounce of 2—meaning the zone has been tested at least twice without breaking (Something we go into more detail about in our “How to trade zones” post)…
But that doesn’t mean there aren’t any other zones in between.
The resistance that seemingly appeared out of nowhere was actually the May 2015 zone, which only had one clean bounce recently…
It’s a weaker zone, but a zone nonetheless. And it’s what halted SHAK’s run (…for now?).
Why are we pointing this out?
Because with the Beta Launch of the Trading Places platform just around the corner, you’ll soon have access to our scanner and all these filters yourself. And understanding how Zone Parameters work—and why you might want to play around with them—can help you fine-tune your setups, manage your expectations, and sharpen your exits along the way.
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That’s all we have for you this week! Catch the next batch of zone alerts on Tuesday—delivered straight to your inbox when you subscribe.
WTF are Zones, anyway?
Zones are key price levels where the market has reacted strongly in the past—such as sharp reversals or sudden swings.
They’re areas where actual supply and demand met in the past, and likely will meet again.
“Why are these significant?”
Well, it all comes down to three key principles. We like to call them The Principles of:
When I Dip, You Dip, We Dip (aka psychology)
Traders are aware that others are watching these levels (zones) too. With everybody paying attention, this creates a self-fulfilling prophecy where everybody acts in anticipation of everybody else’s actions.
Markets Gonna Market ¯\_(ツ)_/¯ (aka technical factors)
If the first price rejection at the top of a zone was violent, it’s likely that buyers who entered at that level are now holding losses.
But with each retest, the rejection weakens, as there are fewer buyers remaining underwater. This weakens that resistance (or support for all you short-sellers), and could eventually lead to a break through.
Killer Whales (aka institutional plays)
Big players need liquidity in order to place massive orders without moving the market against themselves. So they wait for these zones, knowing a lot of us small fry (retail traders) will come to play.
This allows them to buy low or sell high without causing a lot of waves.
But remember: Zones are NOT guarantees but rather regions of increased probability for market moves. So always, ALWAYS use proper risk management.
Trading Places: Launch coming soon!
Stop obsessively refreshing your charts like it’s your ex’s Instagram.
By combining historical patterns with real-time market data, Trading Places identifies zones and assigns probabilities to each one—helping traders spot potential plays with higher chances of success.
It automates all of the curation, chart-plotting, and alerting for you, so you can actually have a life (or at least pretend to)!
Stay tuned!
Disclaimer: This isn't financial advice. This shouldn’t be news to you.