This demonstrates a stock that lost 20+% in 2 months, and is hungry for a recovery (picture below).

1, 2) The price loses 20+% in 2 months, in a nice orderly progression down, the price stays below the 20MA the whole time, the -DI (red line) is far above the +DI (green line) (of the DMI / ADX indicator) indicating a solid down trend. 

2, 3) The stock shows a very strong 2 weeks of steadily climbing prices, after a nice stochastics cross over below the 20 line.  Notice the great scissoring of the -DI and +DI where they cross over (such scissoring indicates a strong reversal of trend).

3, 4) After the minor high at 3, you can draw channel lines between the last 2 tops, and draw a parallel line through the last bottom to mark the up trend channel.  During a normal progression of the channel, the price will head lower towards the low channel line and bounce up from there. 

4) The stock is so hungry for recovery that the price never makes it to the low channel line, and starts to head up.  Fast stochastics crosses over the slow stochastics, MACD is turning around the zero line.  

5) Look closely at the DMI / ADX action, the +DI and -DI were approaching each other after strong movements up and down, and are now bouncing off each other, indicating a continuation of the up trend.   All this is signaling a good probability of a jump in price.