Drop and Reverse Setup

Hi Pat.
I watched the AMZN video on drop and reverse that you suggested.  You explain very clearly how to execute the trade.  However, I feel like I’m still not clear on when I should be considering this as a strategy for an entry.  What I mean is, are there conditions that need to be present in the previous intraday action?  What exactly about the chart leading up to that day qualifies the stock for this entry technique?  Does it only work for an add-on or can it be a first buy?  
Thanks,
Virginie