Trade of the Day - ENER

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How and Why was the Trade Executed

ENER was identified as an important pre-market mover based on the trade count level. The next step was to identify and map existing support and resistance levels from the daily chart view. These are identified in light blue on the chart above.

The next thing to do is check Briefing.com or a similar service for news on the stock to determine if it has potential beyond the pre-market action. Unfortunately, Briefing missed this one until later in the day.

The next step is to see how it moves just after the open. ENER observed recent resistance as support which was a positive sign. It was now safe to enter a position. I waited for a good setup because I didn't want to buy it too far above its 10 period EMA on the five minute chart.

Shortly after 10:00 the stock had a shallow pullback in which it observed the December high as support. As the stock lifted from its narrow consolidation, a position was entered (blue arrow).

The position was stopped out during lunch and re-entered shortly after 1:00 as the stock crossed above the 10 period EMA. The late afternoon euphoric volume spike foreshadowed the end of the party and the stop was tightened.

N.B. - ENER closed very near the high of the day, so keep this one on your radar tomorrow morning.