CDWC gapped up on high volume this morning. It managed to take out the ORH on the third bar. The fourth bar carved out a tweezer top reversal pattern and the stock failed to hold the ORH as support. The failure resulted in a fast move to the downside. After retracing almost 38% of the move from yesterday's low to the morning high, it printed a bullish reversal bar and regained its 5 period EMA in the process. I took a long entry on the next bar. My target was a full retracement to the morning high, but I was prepared to bail if it stalled at the ORH. As you can see from the chart, when the target was reached, CDWC still looked strong so I took a partial. Shortly after taking out the morning high, it started carving out a bearish evening star, so I folded.
Tuesday, April 24, 2007
Dummy Trade of the Day - CDW Corporation (Public, NASDAQ:CDWC)
CDWC gapped up on high volume this morning. It managed to take out the ORH on the third bar. The fourth bar carved out a tweezer top reversal pattern and the stock failed to hold the ORH as support. The failure resulted in a fast move to the downside. After retracing almost 38% of the move from yesterday's low to the morning high, it printed a bullish reversal bar and regained its 5 period EMA in the process. I took a long entry on the next bar. My target was a full retracement to the morning high, but I was prepared to bail if it stalled at the ORH. As you can see from the chart, when the target was reached, CDWC still looked strong so I took a partial. Shortly after taking out the morning high, it started carving out a bearish evening star, so I folded.
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8 comments:
Hey Jamie:
Quick Q: When you're trading intra-day, do you give more preference to the 5-day EMA or 10?
Tx.
Hey Yaser,
I used to use the 10 and I've recently changed to 5 because it hugs prices more closely. On the daily timeframe, I still use the 10.
Jamie, the semis were up today. In your opinion, any low risk entry that were offered by NVDA, SNDK? THks
Yes, the semis broke out of a 5 month base today. There were two good setups on NVDA 1. Break of ORH on the 6th 15 min. bar, and 2. dummy entry on break of 10th bar.
SNDK retraced 50% of the move from yesterday's low to the ORH. The 4th 15 min bar was an inverted hammer, so you could have entered long above that bar with an initial stop below the low of the day. It eventually tagged the 50% Fib. extension.
Thanks Jamie. But for NVDA, i see a daily pivot at $32. Would the 2nd entry be a better one?
Yes, the second entry is safer because it's on the daily pivot. In essence, the 1st entry I suggested is the initial breakout attempt, and the second entry is a consolidation of the first attempt through price contraction. The contraction is a more efficient entry point.
great trade Jamie. I just missed this stock on the 5-min chart after it climbed back up from the initial 100% retrace. There was nice consolidation at the 61.8% intraday fib. level but I didn't act. Glad you made it work!!
Thanks 00NR7,
Once I get a signal on the 15 minute timeframe, I also use the 5 and 1 minute timeframes to time the entry better.
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