ARTC was setting up as a short on the daily timeframe above. We had two NRBs under the 5/20 MAs and a crossover was imminent. Price tried to rally on the open but failed and quickly fell below the MAs on the 15 min. timeframe. After that it was just a matter of waiting for a dummy entry. Around midday, ARTC carved out a NR inside bar - NR7 at the base of S1. My target was the daily pivot (green line). The BO bar had high volume and closed near its lows, so no need to partial out at R2. The target was reached by early afternoon and closed on big volume which usually foreshadows the end of the move is near.
I ran a daily scan last night for 2 inside bars on declining volume and found two charts - CREE, and MCD. CREE is always interesting because it has such a high short float. Every time it takes out resistance the short squeeze comes into play. I messed up my alert and missed the early move, but I was able to jump in after an orderly 50% retracement.
I ran the scan again tonight but didn't get any interesting hits.
SGR and JOYG were failures. Similar setups off of NRBs near R2 base. SGR still looks good on the daily, so we'll see what tomorrow brings.
Updating the watch list - removing AFFX, FTEK, NTRI, EMC, TECD., and adding SPWR, QCOM, UAUA, and CREE.
8 comments:
jamie:
good that you posted about JOYG..we learn from the failures as i fail more often :(
but you seemed to have a very very tight stop (5 cents?)...this easily could have gone up after stopping you out! what gives?
Gurlate,
The red star with long upper shadow almost looked like a gravestone doji which is usually the kiss of death.
The Qs also printed a similar stick at the same time so I just had a bad feeling.
Jamie,
How do one differentiate between capitulation vs breakdown? Likewise euphoria vs breakout? I'm a little hazy about this, hope you can enlighten me. Thanks
Jon
Anon,
Capitulation is an acceleration in the price drop, often vertical, accompanied by a huge volume spike.
The last WR red bar on the ARTC chart is capitulation. Euphoria is the same on the long side. Both of these are usually followed by a retracement.
Breakout is the beginning of the move and capitulation/euphoria foreshadow the end of the move.
jamie - I see you prefer NRB entries on low volume at pivot areas. Which I understand and your ARTC is a great example of that. But what about a candle that crosses over a pivot area on increased volume, but not necessarily a huge spike and not exactly a NRB. A good example of what I'm talking about is PAYX, 10-min chart, 4th candle. I was watching this but I thought the candle was a bit too wide and with the volume increase I thought it might be capitulation. I guess what I'm asking is... does the volume increase in PAYX look more like breakout volume than capitulation volume? Another example is LRCX, 5-min chart, 10:25 candle. While both these entries are not NRB, they are strong bars with no upper tails and I look for these types of bars on my normal setups.
Thanks for the analysis and clarification.
OONR7,
The PAYX entry is great. It is fed by the NR inside bar 2/15 min. and taking out the next PP level at the same time. On the daily chart we have resistance in the $44.20 range so we know that R2 will be the prelim. target as it lines up perfectly.
LRCX consolidates sideways for an hour within the parameters set by the 15 min. OR. Also a good entry.
Just curious, when you say 4th 10 min. bar for PAYX, would you enter during the fourth bar or after completion? Looks like breakout volume.
Capitulation/euphoric volume spikes usually come after extended, high volume, vertical moves. After price has extended well beyond the previous day's range. In fact now that I look at it more closely, the 15 min. OR for JOYG looks like a euphoric volume spike, if we look at it as an extension of the previous day's late day move and in the context of a mult-day uptrend. Hindsight, of course is 20/20.
thanks jamie, that was exactly the answer I was looking for. As for PAYX, 4th bar, 10-min... yes, I would absolutely wait for the completion of the bar. I'm guessing you like a break of the 2nd bar high (15-min) as an entry.
Welcome OONR7,
Yes, coulda, woulda, shoulda PAYX.
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