Tuesday, March 20, 2007

Dummy Trade of the Day - ACADIA Pharmaceuticals Inc. (Public, NASDAQ:ACAD) Encore

I got a late start to my trading day due to personal business. ACAD was still front and centre on my screen from yesterday and the early NR pullback to support looked like a good trading opportunity. ACAD observed support from yesterday afternoon. As it tried to regain the 5 period EMA, it carved out a NR7 inside bar. My dummy entry was two ticks above the previous bar high and my stop just pennies below. It was slow at first, but the next bar ramped up the volume and ACAD quickly moved towards yesterday's high at which point I took a partial profit. It then consolidated in the upper range of the WRB before breaking out to higher highs. After two more WRBs, I exited the balance of my position. The convergence of the 5 and 20 MAs marked the beginning of the setup.

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