Friday, April 13, 2007

Dummy Trade of the Day - SLM Corporation (Public, NYSE:SLM)

SLM gapped up on the open on high volume. It carved out a bearish looking doji stick on the OR but held the OR low as support. The third bar failed to take out the ORH on a closing basis and carved out a long upper shadow. Despite the long upper shadows, I still took a low risk, dummy entry on a break of the 6th and 7th bars, the latter of which was NR7. I liked the volume pattern on the consolidation and the proximity to the upward sloping 5 period MA as well as the NR7. This convinced me that this trade could work despite the early choppiness. My preliminary target was pivot point resistance dating back to February 1st and 2nd. I took a partial as price approached the PP and I was stopped out on the balance shortly after. I took another entry in mid-afternoon as price started moving up from its narrow trading range. Needless to say the Fibonacci extension was not reached, but SLM did close near the highs of the session and may be a good candidate for some follow through next week.

The EBAY setup was a Brian Shannon - Alpha Trends trade idea (base & break) from last night. I starting scaling in just before the market open and picked up some more on the open. It worked out very nicely - Thanks Brian!

4 comments:

Brian Shannon said...

right on! glad you got it, looks like you traded it well. check out VRSN it is set up very similar to EBAY

Jamie said...

Thanks for the tip Brian. VRSN looks ready to pop. There's a gap dating back to July 2006 that needs to be filled, so I'll be targeting $28.00 on the break.

Anonymous said...

Jamie,

You refer to Alan Farley's techniques quite often (NR7 etc). In your opinion, ss his book "Master Swing Trader" a good buy ? I was going to get it, but I saw it being panned on Amazon's reviews.

Thanks

Jamie said...

I wouldn't recommend the Farley book for new traders. I tried to read it fairly early in my trading career and gave up on it because there was too much information and very little to tie everything together. Many of the setups are difficult to master.

Now, after many years of trading, I can appreciate all of the information presented in book. I recommend his web site hardrightedge.com. Much of the info covered in the book is also available on the website. If after reading all of the examples and setups on the website, you want more, buy the book.