RMBS and QCOM were gappers from the Briefing.com gapper list. RMBS carved out a textbook cup and handle as described here the other day.It's easier to see on the 5 minute timeframe. Normally, we expect a 100% Fibonacci extension from the low of the cup to the base, however, this is RMBS which can be very momo. I did take a partial when price stalled and carved out a NRB at the 62% extension. I've had a few failed patterns in the past, so I didn't want to take a chance. Price retested the base in an orderly fashion and carved out an inverted hammer which confirmed bullish. I tightened the stop when I saw a hanging man.
QCOM was a reversal off of a bullish V bottom at the base of R2. The expectation on a pattern like this is a full retracement back to the ORH. That was achieved faily easily. After that I was hoping for another C&H to take shape. It did, sort of EOD. But I took an entry after a normal retracement (38%) off of a mini base after a higher low.
14 comments:
Thanks Jamie for yet another useful post. I learn something new every time I read your blog.
Nice Trade, I enjoy your site
Jamie,
Should a single inside bar volume contract to be a good entry?
Would it be something like the harami pattern (first wrb then inside NWB)?
Thank you.
Thanks guys,
Jerry,
The longer that price and volume contract, the bigger the move. One inside bar as long as all of the other criteria are met will usually expand. But keep in mind the distance from the rising 5 period ema. Also, check the lower timeframe to confirm the base.
Jamie,
I too caught rmbs but not because of the cup/handle. I entered on the break of the 5th bar on the 15min chart with rising 5ema as support. I don’t quite seethe cup/handle on your chart. I see the handle part but not so much the cup. Doesn’t the 6-8 bar violate the cup definition. Also, I notice you switch your trading style a bit lately from 15 to 5 min and from gapper/bb to more of intraday pp. are you adapting to the market or just trying something new. I too notice that dummy/gapper haven’t been working out lately.
-A
Nice trades Jamie.
Can I get your thoughts on an entry in GME on the break of the high of the 11 5-min candle?
Thanks
ADD
Jamie
If you take a 15 min entry, do you always use the 15 min chart to also set the stop as well? Or do you use a different time frame for the stop?
Thanks Ken
Hi Andrew,
I agree it's an odd looking C&H, but most of the gapper ones have v-shaped cups as opposed to the more traditional u-shaped cups. Bars 6 and 7 complete the cup portion and bar 8 begins the pullback to form the handle.
I see your entry after two inside bars on 15 min. My only concern is the upper shadows and doji leading into that setup. I don't think I would have taken a position based solely on the 15 minute time frame. Also, according to my stop management system, I would have been stopped out on bar 9 on the 15 min.
I'm adapting and I'm making use of more trader tools available on my charting platform. I'm using the traditional PPs combined my visual ones from the daily to derive my trading strategy. It's less work for me, so I can spend more time reviewing a larger number of charts. I always looked at the 5 before but always posted most trades from the 15. The 15 is still my main timeframe. If it doesn't grab me on the 15, I don't usually focus too much on the lower time frames.
ADD,
GME 11/5 min. is a perfect B&B entry. Only problem is the pattern failed.
There's a huge volume spike on the 11th bar. Don't know what happened there. Price moved quickly out of the base to R1, stalled and reversed.
That's why we use stops. ;)
Ken,
If I trade from a 15 min. chart, I will manage my stops on 15 min. Basically, I move my stop 2 ticks below the last WR green bar for longs and 2 ticks above the last WR red bar for shorts, until the target is met.
If a stock carves out three WRBs in a row, I take either a partial or full profit. After a three bar vertical move, price runs too far away from the 5 period ema and you know there will be profit taking, so it's best to take some too, rather than give it back to the other guys.
Jamie,
I was looking at QCOM after it formed a hammer-like 15 min bar at 10.15, having support from 20EMA and a PP. But the overhead 200SMA stopped me from entering. Then the next bar formed a spinning top and I switched my attention off. Would you have taken the trade right after the hammer without waiting for confirmation?
I'd like your thoughts on HANS and JOSB:
HANS: There is a daily PP at $50 and this is also round #. On 15min chart, there were 3 bars with long upper shadows after the WR bar. But there is good volume.
Question: 1) Would these 3 bars with long upper shadow have turned you off? 2) If not, would you have entered on break of 3rd & 4th bar high at $49.89 or wait till break of $50?
JOSB: On 15min, enter on break of PP at $31.5 or just above the high of the hammer (inside bar with support from 5EMA)?
Sorry for the lengthy comments. I think I'm getting your concepts, but some points are still fuzzy to me. Thanks and appreciate it.
Jon
Jon,
JOSB is like my SGR trade yesterday. I usually place my buy stop order two ticks above the base and would have been filled on the fourth 15 min. bar.
QCOM caught my eye on the 15 on the fourth bar. The 5th bar was choppy but it looked like a potential reversal so that's when I decided to focus on the lower timeframe. I would not have taken the trade off of the 15 min. hammer/star. I need confirmation before entering a setup and I don't usually trade off of one bar unless it's perfect. This hammer is more of a star with shadows on either side.
HANS was extended after yesterday's move so no trade below $50. R2 is just above $50 and I would have used that as my guide. 11:45 hammer like bar and inside hammer bar at noon are first two bars to close above R2, so that's the perfect entry.
nice going once again. I took my first 'Jamie' trade yesterday with Amazon. On the 5-min chart, I saw a nice cup and handle forming. I looked at the :15 chart and saw a nice inside nr7 forming just below the intraday pivot point. I bought off the break of the 11am candle high (:15) and price just shot up. Is this what price usually does? Wow. I took a smaller than normal position and exited at around 80.80 (half ass exit).
Wondered what you thought of the setup.
Hey OONR7,
Nice scalp on AMZN. I see where you anticipated a C&H pattern, but I believe this is just a bullish rounded base and you executed at the base of the pause before the last thrust up. Good eye on the inside NR7 bar. The C&H pattern will have two distinct parts with slightly more of a retracement between the two.
The pattern generally takes off quite fast. Check out the move on BIIB near end of session. It's trading nirvana when you catch a move like that.
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