Wednesday, April 18, 2007

Dummy Trade of the Day - Overseas Shipholding Group Inc. (Public, NYSE:OSG)

OSG gapped up on the open and carved out a WRB, followed immediately by an orderly pullback. It printed a three bar bullish morning star reversal pattern just above the rising 5 period EMA, followed by a NR7 as volume contracted to its morning low. I waited until price took out the high of the morning star pattern before entering long. I estimated at least 2R even if the pattern failed at the OR high. That did not happen and as you can see from my two exit points. It doesn't get much better than this. I took a partial at the 38% Fibonacci extension and exited the balance at $67.00. The volume pattern is picture perfect - declining volume on the pullback and progressively increasing volume on the rally. On a daily basis, today's volume is about 5 times average.

Trader-X also traded OSG - read his post for more insights - also check his archives for similar trades to OSG.


MEDI was a midday pullback reversal setup. It met most of my criteria for this setup except the increasing volume on the rally.

8 comments:

ADD Trader said...

Hi Jamie,

Did you enter when the 10th bar broke the high of the 9th bar, or was that the signal bar, and you entered on the 11th bar?

Thanks,
ADD Trader

Jamie said...

Hi ADD,

On the MEDI trade I entered on the 10th bar as it broke the high of the previous bar. The reason is these bullish engulfing bars are often very wide. So there was an element of anticipation in this trade because I didn't wait for the signal bar to complete itself.

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ADD Trader said...

Thanks Jamie. That was going to be my question....do you enter the trade before the candle completes. I have witnessed the pattern complete where I thought the engulfing bar was too wide to make an entry resonable, so your explanation makes perfect sense.

Thanks
ADD Trader

MillionDollarJourney.com said...

What stock screener did you use to notice the OSG gap up?

FT

Jamie said...

I run a gapper scan on stockcharts.com after 10 p.m. EST and that's where I found OSG.

MillionDollarJourney.com said...

Thanks for the info Jamie. I didn't notice that stockcharts.com had gap information.

FT

Jamie said...

Hi MDJ,

As a subscriber to stockcharts.com real-time extra I can run real time scans intraday. Not sure if the free version has this feature.