It is important to not buy in the face of immediate overhead supply or resistance, or short a stock with support or demand directly below your entry point. Trading positions should have some room to run. Typical patterns consist of breakdowns, breakouts, countertrend retracements in either bull or bear markets, pullbacks, corrections, and trend reversals. Sideways trading patterns are common where a stock trade between prices but within a horizontal pattern. Let's define these.
Stocks can breakdown before the fundamental logic for such a move is apparent.
Generally, a stock breaking below a major moving average will continue to the next major moving average unless major support intervenes to stop the downward fall. Further, stocks that get oversold can rally even if the rally uptimately fails. It is a bad sign for stocks to breakdown on low volume because price follows volume. Often downtrends and breakdowns will end with a climactic sellof on huge volume intra-day, followed by a close above the open and at the top of the range. Key Reversal days can occur on exhaustion sell-offs setting up a good buy the next day if the stock opens positively.