I was away for most of the day, arriving back to my trading desk just before 2:00 p.m. EST. I noticed that a few of the watch list stocks had a bullish run in the morning and were now retracing. GRMN set up a bullish reversal pattern after retracing 38% of the last leg up from Friday's low to the midday swing high. It carved out out a bullish tweezer bottom, the second bar of which was a green hammer on the 15 minute time frame. This pattern closed at the base of the intraday pivot point.I waited until price moved above the intraday PP and took a dummy long entry. My prelim. target was a retest of the swing high. Since GRMN had taken out the daily PP and was trading at all time highs on the day, this setup had a very good chance of being successful.
N.B. - Normally for stocks that gap up, I calculate the Fib. retracement from the ORL to the swing high. Since GRMN did not gap up, I used the previous day low to calculate my Fib. retracement level.
The 5 minute chart below shows the precise entry.
13 comments:
Jamie,
Nice late day trade. Good job sitting through the small evening start reversal on the 5m following your entry. I did not trade GRMN.
I was short AKAM again (last Thurs and today), and long SNDA (briefly).
I missed a nice mid-day B&B in CROX - tails and hammer at 38% level marked the turn. CAL was a good short coming out of IB/NR7 on daily - I did not trade CAL.
"star" not "start"...
Hey Jim,
I really believe in the this retracement setup especially for stocks trading in the daily spot. CROX had a great one too. Slower at first than GRMN, but much more powerful in the final hour.
CAL was a nice setup off the Friday's NRB, but very fast out of the gate this morning. AKAM is setting up for a retest of recent lows.
Think this market is setting up for a fall with all these stars and dojis.
Jamie,
Nice one on GRMN. As you said, CROX is similar to GRMN. For CROX, would you have entered at the 1.55pm ET 5min bar on break of hammer high?
The casino stocks are on fire lately. Any chance for low risk entry for LVS today?
Thank you,
Nat
Yes, multiple Q-stars and significant divergence in the SPY. Should produce strong resolution.
The RIMM could be at the rim. If we get an overnight shift, that could leave a nice reversal pattern to correct the over extension.
Thanks NAT,
Yes, for CROX, I would have waited until price crossed the mid $ number $59.50.
LVS - Second 15 min. bar was inside but I would have played it on the 5 min. timeframe. Break of 6th 5 min bar which was NR7. Around 2:00 a bullish rounded bottom formed on 5 min. timeframe. NRB at 2:10 was a great low risk entry point.
Jim,
Yes, RIMM/RIM - inverted cup & handle on 15 min.
Thanks Jamie.
I zoomed in on 5min chart on LVS and see a few doji and bars with long upper shadows prior to the 6th bar. Would that have been a negating factor enough to put you off this trade?
Nat
Jamie,
Nice lay up with grmn.
Can't believe how many naz >
40 either momo'd from the get go, or pulled back and momo'd, then did a fib retrace, reversed and momo'd again. days like today I should just look at the WL of 76 na >$40 and see who's huffing a puffing.Maybe a daily and 5 min chart for Tuesday. The Briefing premkt had some winners: cpsl crnt dell aapl har arrs adct csiq. Looks like some retailers are lowering. Not GOOD
Nat,
The first half hour can be choppy. You scan wait until the tops of the doji shadows are taken out. I like that the 5th bar is strong and offsets the two preceding dojis. I would still take the trade.
BL,
Mondays can be slow out of the gate, yesterday was very momo. Sorry I missed most of the session.
Could be a give back session today.
Thanks Jamie. When you say "wait until the tops of the doji shadows are taken out", do you mean break above the shadow tops or a close above the shadow tops?
Nat
NAT,
Break above the shadows. If you wait until it closes above the shadows, your entry might be too far from 5 period ema.
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