AMZN gapped down on the open and tried to recover but could not close above its down sloping 5 period ema. About an hour into the session we had a bearish 5/20 crossover, implying further weakness to come. When I see a bearish crossover, I want to short as close as possible to the 20 as it provides added pressure along with the 5.
Still I need to wait for a base to setup. As you can see from the chart above, I had only a two bar base, but I felt that the break of the base would take price down to the rising 50 period SMA which was my prelim. target.
I took a partial as price and the 50 came in close. I knew we would bounce, but as expected it was a weak bounce just waiting for the down sloping 5 period ema to catch up to price. Once price broke through the 50 MA, things started to speed up and the primary target - PP from Friday's ORL - was achieved in a swift, orderly fashion.
This trade has many similarities to my CMI short last week.
2 comments:
Pure art... and you, sir, are an artIST!
I shorted BAM coming back thru 41 after it tested above and failed to hold a recent PP level. Later in the day, it decisively took out its ORL and moved lower into the close. It should test lower... 40 and probably 39.50.
Jim,
LOL, Thanks.
BAM chart is very up and down. The daily looks like a huge bear flag following that bearish rounded top.
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