The BRLC chart speaks for itself. Just click on the chart to enlarge and read my notes. NR inside bar at the base of the ORH - Sweet! I took a partial after three WRBs because that's one of my trading rules. The euphoric volume spike on the 4th WRB, was a big hint that the move was over. Plus the fact that price had extended 100% from the previous day low to the ORH.
The NDAQ is less obvious because it's a fade. My rationale here was the loss of the round $ number $38.00 at a low risk entry point. The preliminary target was R2 (red dotted line). Once it closed below R1, I thought we could go to P, but then it recovered R1 and I folded.
12 comments:
Jamie,
I notice throughout the day that I see a number of stocks test these round numbers, sometimes for a long time. Do you find the break of these round numbers to be a good setup for a trade or does price usually gravitate back to the round number after the breakout?
The first 4 bars didn't close above $38.50. Was this the sign of trouble that make you fade?
When you mention 3 WRB, if it has shadows instead of body, would it be the same?
how many stocks do u trade a day on avg? whats ur win % a day?
Jonathan,
That's a great way to describe it. They do gravitate back to the round number for a retest. I was watching NDAQ on the 5 min. as well and it kept testing $38.00 but could not close above it. That's probably a good way to set up these types of trades. Wait till the retest fails and then jump in.
Jerry,
The second and third bar carved out a tweezer bottom and bar to bar shake-out which normally is a bullish signal. However, as you noted, price could never break above $38.50 and the next four bars were bearish.
I also looked at the Fib. retracement similar to OONR7's routine and noticed that NDAQ was so weak that it couldn't retrace a full 62%.
A vertical move which includes 3 WRBs usually closes very far away from the 5 ema and that usually means it's time to consolidate. I usually look for full bars with no overlapping bodies. If there is a NRB with long shadows in between, that probably means there is overlap. If it comes on bar three, it could signal a top (bottom).
Do you like the setup on APOG?
Anon,
On average 4 trades per day. Some weeks, the win rate > 80%, but not this week. Markets have been choppy yesterday and today which means lots of stop outs and scratches.
Does Anon have a name or initials?
Jamie, can you list some of your exit rules? I have a tough time staying in a winning trade. Thanks.
Jerry,
APOG looks like a handle & cup as opposed to a C&H. It goes from making lower lows to breakout without a pause at the base. I would not have been able to get in.
PN,
I partial out most of the time unless my target is met.
Partial at PP, support/resistance or intraday swing highs and lows. Partial after vertical moves ie. 3 WRBs. Also volume spikes are good indicators that the move is coming to an end.
You can also try moving stop above below the previous bar high/low. But you have to give the stock a chance to get going as the initial BO is often retested.
great trade, must've been able to load up on shares with a $4 stock.
Thanks OONR7,
Yes, the trigger bar was tiny.
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