The first chart is the daily and the second is the 5 minute timeframe. IBM was a watch list stock which was showing signs of fatigued. At the end of May it carved out a lower high. This week we had a hanging man on Monday which was confirmed yesterday. I set an alert for IBM on a break of the blue lines. The one caveat was the proximity of the 20 day EMA (green MA -marked by red support line). That's the problem shorting strong stocks, one never knows which level of support is going to provide a bounce.My other problem this morning is that all of my alerts went off in unison, so it was a bit of a challenge sorting through all of the setups. IBM was one of my favorites, even though I missed the ideal entry (break of red line), I took a low risk short as price broke $104.50. I took a partial after 1 pt. and tightened the stop to the minor PP marked by the thin blue line. I covered the balance as it appeared the market might end the day with a rally, however, the rally was short lived and we closed on weakness.
5 comments:
Jamie,
Since IBM gapped down, did you use Fib in determining your entry/exit? If not, how do you determine your target exit or you only use candle stick to guide you?
Pat
Pat,
I prefer using Fibonacci for wider gaps. Narrrow gaps like IBM result in too many lines.
I had studied the IBM chart last night and anticipated a big move once the 20 EMA (daily) was taken out.
Jamie, you are just amazing day in and day out!
I know the system you have works. I think if you start a trading alert service (fee-based), you will help a lot of newbies like me master this art.
cheers
EY
Thanks for the kind words EY!
If you are looking for a system similar to mine, I recommend highchartpatterns.com. I used their system and it works. It also helped me enhance my own methodology.
Hi Jamie,
Good trade. I was looking at IBM too but I didn't take it. How do you get these pivot lines? They are not Fib pivot nor "normal" calculated pivots. Do you draw these lines based daily candle pattern and you own experience? Thank you.
Cathy
Post a Comment