CAL was weak coming out of yesterday's session. This morning it gapped down on the open. I shorted just as it was breaking the OR low. My initial stop was just above the OR high. I covered 50% as price tested Tuesday's reaction low. I was hoping for further weakness, but when I noticed a bullish rounded bottom taking shape, I immediately covered the balance of my position and waited for the next stick to open higher for an entry long. I exited the long position as price rallied back up to test the OR low.Another test of this low, could see a successful break lower so put this one on your watchlist for tomorrow. Support and resistance often hold on the first two tests, but it has been my experience that the third test succeeds 80% of the time.
2 comments:
Hi Jamie,
Nice trade on CAL. How do you manage to exercise such flexibility? I always find it hard to long (call) and short (put) the same stock in the same session.
You're right, me too, but that rounded bottom was just too compelling and I had to go for it.
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