Dummy Trade of the Day - Ciena Corporation (Public, NASDAQ:CIEN)

CIEN gapped up on strong earnings and challenged its weekly pivot high (blue line) in the OR, but failed to close above it. Price pulled back just above the 32% Fibonacci retracement level and then started to move up again slowly. The 11th stick was NR7 and was sitting on support of the rising 5 period EMA. I decided to scale in as price took out the high of NR7, knowing that the PP resistance could be problematic. Three bars later it was challenged and failed again so I moved my stop to break even. About an hour later, yet another attempt failed. At this point I was getting frustrated. However, I talked myself into holding on because each bar was now hugging the PP. In the last hour price finally closed above the PP and the ORH. Although the trade did not extend to the target 38%, and I did not add to my position on the break of the ORH as I normally would, it did generate a 1 pt. gain. Oddly enough it was satisfying because having missed the first hour and half of the session due to personal business, my expectations for the session were low.

CAL gapped up and tagged its daily pivot high in the OR. After testing the PP for a full hour, price retraced 50% before making a second attempt to break out. After closing above the PP, it carved out a red hanging man. I shorted CAL on confirmation of the hanging man as price fell back below the PP.

Normally, I like to see some basing at resistance before price breaks out. Here CAL, made a vertical move from the 50% retracement level back up to the PP. This type of breakout often results in a failure because the stock is exhausted by the time it reaches the key technical level.