TZOO's earnings were a real disappointment as noted here this morning. The pre-market trade was too choppy so I waited to see how it opened and decided to short on a gap fill. My target was yesterday's low and I covered my intial short for a gain of 2.4 pts. When I came back from lunch, I noticed it couldn't get a bounce and was hovering just above support. It reminded me of YHOO yesterday so I got ready to short again on a breach of support. I covered half of my second short as soon as price fell into the next support level and covered the balance into the close. I never imagined that a stock could shed 6 points on a two cent beat, but I guess the party's over and everyone wanted out.
Thursday, July 20, 2006
Trade of the Day - Travelzoo Inc. NASDAQ: (TZOO)
TZOO's earnings were a real disappointment as noted here this morning. The pre-market trade was too choppy so I waited to see how it opened and decided to short on a gap fill. My target was yesterday's low and I covered my intial short for a gain of 2.4 pts. When I came back from lunch, I noticed it couldn't get a bounce and was hovering just above support. It reminded me of YHOO yesterday so I got ready to short again on a breach of support. I covered half of my second short as soon as price fell into the next support level and covered the balance into the close. I never imagined that a stock could shed 6 points on a two cent beat, but I guess the party's over and everyone wanted out.
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2 comments:
Nice trading, Jamie.
In this case, what would your stop have been - yesterday's high?
Appreciate all your help.
Thanks.
Chris M
Thanks Chris,
Yes, my stop was set 10 cents above yesterday's high. Notice how volume dried up at lunch time and then on a huge volume spike, the stock fell through support. This is one of my favorite setups. The risk reward ratio on low volatility breakouts is usually pretty good.
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