Monday, December 18, 2006

NR7 Price/Volume Expansion - MasterCard Incorporated (Public, NYSE:MA)

From the daily timeframe above, you can see how Friday's NR7 was setting up for price and volume expansion. Friday's bar was sitting just below the converging MAs, so the direction was setting up for a short. However, I mapped out support and resistance on the 15 minute timeframe below and prepared myself for either direction. The first bar was wide range and fell into support on high volume. The next three bars consolidated the WRB but could not bounce, so I decided to short on the fifth bar as it took out the fourth bar low. It was not as smooth as most NR7 trades, but the outcome was profitable and MA closed near its lows.


6 comments:

Simply Options Trader said...

Hi Jamie,
Good find on NR7. This trade looks choppy. What is your initial stop and did you adjust it subsequently? Thks

Jamie said...

Hi Simply Options Trader,

Yes, it was very choppy. In that sense it was a disappointment as I was expecting a fast, smooth swoon.

My original stop was 10 cents above the third bar. I moved it to breakeven once price hit $94.00. I subsequently tightened it to $94.50 after taking a partial profit and lowered it again to $94.00 in mid-afternoon.

Flatwallet said...

Jamie,

You are my f%$^&*# hero. How do you do this shit? one can only wonder. Day in and day out, consistency.

LP

Jamie said...

Thanks LP

Anonymous said...

Same trade as my RIMM trade last week. I bought MA aggressively today and rode out 3 points on it today. Looks like a falling wedge with positive divergnces on the MACD and RSI. What do you think about how it looks Jamie. Thnx. BAsim.

Jamie said...

Basim,
I'm not sure about the falling wedge, but MA did get a technical bounce from a gap fill support dating back to Nov, 10th (Nov. 13th was the gap up. Today it also carved out a bullish engulfing pattern and closed above its 20 and 10 day MAs. I also traded MA this afternoon but sold on the close. Next resistance area is $98.50.