The first chart is the daily timeframe of JOYG which shows the base and break pattern as well as the pivot point support area which I used as my target on the short entry highlighted on the 15 minute timeframe below. Notice how close the downsloping 5 period ema is on the daily timeframe.
I entered short on a break of the Friday's low. I used the red line as my stop because it lined up nicely with an intraday pivot area from last week. JOYG fell like a lead balloon, carving out three WRBs. I covered as price approached the PP target. Around 11:00, the NASDAQ tested its 200 DMA on the daily timeframe. At around the same time, JOYG set up a dummy long. There is often a reversal after a stock tests a significant PP on the daily timeframe. My target was the base from the B&B pattern and it was tagged during lunch.
The first chart is the daily timeframe of JOYG which shows the base and break pattern as well as the pivot point support area which I used as my target on the short entry highlighted on the 15 minute timeframe below. Notice how close the downsloping 5 period ema is on the daily timeframe.
I entered short on a break of the Friday's low. I used the red line as my stop because it lined up nicely with an intraday pivot area from last week. JOYG fell like a lead balloon, carving out three WRBs. I covered as price approached the PP target. Around 11:00, the NASDAQ tested its 200 DMA on the daily timeframe. At around the same time, JOYG set up a dummy long. There is often a reversal after a stock tests a significant PP on the daily timeframe. My target was the base from the B&B pattern and it was tagged during lunch.
17 comments:
Thanks for this one Jamie, Nice call.
Welcome Glenn.
Super trade or 2 trades.
For any stocks that traded up/down and then reverse, do we or must we wait for the MA to cross before enter or if BB appear, we can enter?
Thanks
This was a great way to start the day. Thanks!
Jamie,
1) Do you just set an alert for JOYG, in this case, so that if/when it falls below your 1st blue-line pivot point, it 'beeps' you?
2) Am I correct that you started monitoring JOYG on July 25, since tha big gapped-down? If not, when did you add JOYG to your shortlist, and why?
3) Since it appears that you have already plotted out all the pivot points way ahead of time (i.e., you sort of know the Entry & Exit under ideal situation), do/did you PREPARE your order ahead of time, so that when the alert comes on, all you need to do is just one click of the button to execute your trade? Or do you go as far as 'automating' your orders? [I checked the 5mins chart of JOYG today, (after reading this post, of course) and your entry was made before the end of the 3rd bar. Usually during that time of my trading day, I'm still busy looking at various charts to filter out the bad ones... basically, by the time I'm done with my chart filtering, you have already earned more than 6Rs!) :-)
Thanks!
Welcome Eric,
Agree, when the first trade is this good, it pumps you for the rest of the day.
Thanks Jerry,
You don't have to wait, you can trade B&B as long as it's a high quality B&B (not too choppy and not too many long upper shadows).
i don't see the dummy long. is it because of the hammer. i thought it had to be a nr7 or inside bar for it to be a dummy or am i just being a dummy??????
thank you
bid
CDT,
1. I usually set the alert 10 cents above below the PP so that I know ahead of time to get ready for the trade.
2. JOYG has been on my watch list since August 31, 2006 when it showed up on a gapper scan. I was working at the time and only managed to catch the second wave, but it was a nice trade. It's in the archives.
I did recently classify my watch list into three categories and JOYG is in the C-list of weak stocks. This is a lot of work and I have to admit that I'm a little lazy about keeping the three categories orderly and up-to-date.
3. My morning routine is to first load all of the Briefing gapper stocks into Esignal and IB. The gapper list today was not all that inspiring so I focused on my B&B candidates. Two triggers on the open JOYG and TBSI. I prefer JOYG because TBSI has a wide spread and I wanted to see TBSI consolidate a bit.
I've been trading on and off since 2001, so my confidence level is different than someone in year 1-3.
I had a very strong feeling about JOYG based on the daily and the 15 min. which closed on its lows on increasing volume on Friday. This intuition will develop over time. I had absolutely no intuition in my first two years as a trader.
My orders are not automated. The only time I set an order ahead of time is on a B&B intraday, not on the open. I used to trade a break of the pre-market high/low if it was NR, but I rarely do that nowadays, especially under current market conditions.
I understand how long the the gapper scanning and sorting routine is as I do it myself, but I prefer to trade stocks that I know, so if I have a choice between one of my watch list stocks and an unknown gapper, I go to what I know first.
Another thing I do is save some of the gappers that had nice moves. GYI, which you mentioned last week, has been very good, as well as NT and maybe TTI. TTI was a gap trade for me on Friday. Not sure if it will stay on the list but is there now. That's how the watch list is formed - from gappers. The rationale is that if a stock gaps on huge volume, it will consolidate after the gap day and continue the move. Momentum is with stock and usually stays for days, weeks and even months.
Hope I answered all your questions and hope this info can be useful for you in your trading.
Bid,
You're probably right and that would make me the dummy ;)
I have no doubt, comprised the dummy rules to suit myself, but my interpretation is a low risk entry based on a meaningful stop. My stop was Wednesday late day swing low which gave me about 30 cents risk.
I agree 100% that NR7 and inside bars are much better intra-day bars from which to set up a dummy entries.
jamie,
the two blue pivot lines- how did you arrive at each of those?
thank you
bid
Bid,
Sorry, I read your comment too quickly. You were refering to the long entry and I responded on the short entry.
My rationale for the long was a NRB coming out of a base following capitulation. At the time of entry, I believe it did qualify as NR7 because it was the narrowest bar with the least volume.
Bid,
I'll post a chart later tonight to explain how I determined the pivot lines.
Jamie,
Nice trade up & down on JOYG.
Can you take a look at AAPL today? There was a PP formed by the low on 5/7 and 10/7, and also the 50DMA. But in your view, do you think there is any low risk entry at all for the ride up? If there is, how would you have managed the trade? Thanks
Pat
Pat,
Check my latest post re: AAPL PPs.
Plus... you still manage to find time to answer all these questions from your fans/students!
Someday if/when I get to be half as good as you are, I will remember to help out those who need help.
Thanks for taking the time to answer my questions!
Welcome CDT
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