BCS gapped down on the open and immediately started to retrace. It carved out a bearish tweezer top reversal pattern at the base of S2 pivot point. I took a dummy short on a break of the 4th bar. The BO didn't close near its lows, so I was on alert for a possible failure. The next bar tested the ORL and bounced. I guess I really believe in this candlestick reversal pattern because I had a chance to partial out on the test of the ORL and I chose not to. The next bar finally closed on its low and I knew my patience would pay off. I took a partial after three WR red bars and lowered my stop two pennies above last WRB. The reason I take a partial after 3 WRBs is that price gets too extended from the downsloping 5 period ema. On slower moving stocks, it's not necessary to do this. I expected price to consolidate and continue lower after lunch, but that didn't happen and I was stopped out on the balance. So on a Fib. extension basis, BCS did not meet the primary target of 38% from the previous day high to the ORL.At the time of entry, I thought the setup looked similar to OONR7's signature setup. Maybe not cause I notice he didn't trade this one.
10 comments:
Jamie,
Did you consider trading RMBS on the third 15-min bar using the two inside method you previously described?
Jonathan,
Did you mean RVBD? RMBS is not on my watch list although I did trade it as a gapper C&H pattern last week.
I see two inside bars on RMBS but price is trading below R2 and the 5 period ema is too far away. You could have shorted on a break of second inside bar because all those long upper shadows implied that R2 was being rejected at that point in time.
RVBD also carved out two inside bars at base of R2 (bars 4&5) but did not meet the declining volume criteria. It did however, set up a long entry on break of NR7 (12:15 bar on 15 min.)
Jamie,
Thanks for the quick response. I was indeed referring to RMBS. I thought I got it off your briefing.com gapper list but I think now I saw it on CNBC rising in pre-market action.
Anyway, I did not trade it but I was looking for an upward move after the inside bars, which obviously never occured. That brings up another question: What are your thoughts/rules about trading against the moving average? I was afraid if I went short on RMBS I would see support or a turnaround at the moving average. I notice most of your trades use the MA for support or resistance in your favor instead of against it.
Thanks.
Jonathan,
From experience, I don't like to short a strong stock. RMBS is on a roll right now and I wouldn't have faded it either. I prefer to wait for a retracement into a support zone and enter long on a strong stock.
I did that with FMCN today. I'll post the chart later.
RMBS also retraced approx. 50% from Friday's low to ORH and reversed back up.
I haven't elaborated any rules for trading against trend because I've never had much success with it.
Hi Jamie,
Your point of entry is not quite near the 5EMA. I suppose the candlestick pattern mitigated this? Thanks
Anon,
You're right and the distance from the 5 ema is probably why it stumbled and got off to a slow start. I was conscious of it upon entry and should have mentioned it in the post as a caveat.
Jamie... I did look at BCS briefly before removing it from my list after it hit the intraday fib. ext (drawn from the OR low to high. However, if I hadn't done that, a nice short area on the 5-min was the 11:10 bar.
Now, time for a Jamie trade. I actually went short AMGN off a break of the 2nd bar low (15-min chart) as it closed right below S2. The 5ema wasn't as close as I'd like, but I thought it was close enough. This trade did well for me but I wonder what your thoughts are. Thanks.
OONR7,
Thanks for the feedback on BCS.
AMGN - WOW!
That's the type of setup I would take if AMGN was on my focus list the night before. Nice work.
thanks jamie... I'm taking one of your type of setups at a time and trying to spot them early. The inside bars really make a lot of sense to me especially when they're at SR areas.
OONR7,
The inside bars are gems and can set off momo moves.
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