Wednesday, January 10, 2007

Dummy Trade of the Day - IntercontinentalExchange, Inc. (Public, NYSE:ICE)

ICE is on my momo stock watchlist. This morning it broke out of a three day consolidation high, building on last week's big move. About an hour after the break, it started consolidating the move in a narrow channel on declining volume. During lunch, it started making a move towards the top of the channel. I took a low risk dummy entry on the channel break and a slight uptick in volume. ICE ascended in a nice orderly fashion until price approached $134 and things started to pick up. Once price was safely above $134.00, I tightened my stop to that level and I was taken out shortly thereafter.

I wanted to capitalize on the nice move in semiconductors without chasing (NVDA, SNDK) so I looked and found a somewhat rounded base forming in LRCX. The $SOX had a lot of momentum in the afternoon and this entry worked out very nicely.

4 comments:

Zoomie said...

Jamie, great minds think alike ;). Seriously though, do you use fibonacci #'s for targets at all?

Bubs said...

Jamie, great trades again. Just had a quick question on how you find your trading setups?

Bubs

Jamie said...

Hey Zoomie,

I use Fibonacci when I can't find clear resistance levels on the longer timeframe. However, in the case of ICE we were in blue sky territory so there was no resistance.

I don't have access to Fibonacci at work so I don't often get the opportunity to use them.

They are helpful in that they do fairly represent consolidation zones, but just like resistance lines, they can entice early exits.

That's why I often scale out of my positions.

Jamie said...

Hey Bubs,

I have a short list of momo stocks which I review on the daily and 15 minute timeframes every night. I also scan for gappers and momentum plays intraday, using Trade_Ideas scanner as well as some of my own scans using stockcharts.com realtime extra. I also keep a close eye on the Qs and sectors.

I'm sure that my momo watchlist includes many of the same names as you get from HCPG. One of these days, I'm going to sign up for the free trial.