FMCN broke out again on the open with a WRB. Initially, it looked like it might carve out two inside bars but instead we got a bearish tweezer top reversal (two consecutive candles with the same highs, the second of which is bearish - this is a minor candlestick pattern which requires confirmation) on bars 3 and 4 and price retraced in an orderly fashion back to the 38% Fib retracement of Friday's ORL to today's morning swing high.
The difference between a retracement and a reversal is volume. This retracement took place on fairly light volume so I kept coming back to it to see if it would set up another long entry. After pausing at the 38% level, it carved out a series of lower highs and I waited for price to consolidate that initial bounce before going long. As usual I took a partial when price approached the morning swing high. EOD it almost tagged R2.
RVBD carved out 2 inside bars (4&5) at the base of R2 but did not meet the declining volume criteria on the second inside bar so I passed. Eventually, it printed NR7 at a B&B level so I took the dummy long. It was very choppy and I took a partial out of fear of losing it all on lack of momentum.
2 comments:
Jamie, do you have any reservations about taking a trade near lunch time due to the market maker playing games? Also, when is the latest you will enter a trade? Thanks for your hard work.
PN,
Define "near lunch time". Both of these trades were taken during lunch time. I guess you mean before lunch? To be honest, I'm not always conscious of the time because I'm so focused on the patterns and price/volume. But I seem to get more NR7 alerts in and around lunchtime.
Market Makers playing games? That's a good reason to focus more on highly liquid NASDAQ stocks. They are less choppy and more apt to observe S/R lines.
I try not to enter new trades after 3:30 EST.
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