This ADSK gapper short trade is fairly straight forward. In fact, I wish I could fine one like this every day. ADSK was on the Briefing.com gapper list. The ORH lines up nicely with yesterday's pivot low. After trading sideways for over an hour, ADSK finally sprints to test the ORH, consolidates and makes another attempt which fails. The down sloping 20 ema is just above and the NR7 bar is a perfect opportunity for a dummy entry short. The initial target is R2 because it lines up nicely with the ORL. Everything about this trade is symmetrical except the final exit which felt like the end of the move.Wednesday, October 17, 2007
Dummy Gapper Trade of the Day - Autodesk, Inc. (Public, NASDAQ:ADSK)
This ADSK gapper short trade is fairly straight forward. In fact, I wish I could fine one like this every day. ADSK was on the Briefing.com gapper list. The ORH lines up nicely with yesterday's pivot low. After trading sideways for over an hour, ADSK finally sprints to test the ORH, consolidates and makes another attempt which fails. The down sloping 20 ema is just above and the NR7 bar is a perfect opportunity for a dummy entry short. The initial target is R2 because it lines up nicely with the ORL. Everything about this trade is symmetrical except the final exit which felt like the end of the move.
Subscribe to:
Post Comments (Atom)
21 comments:
Jamie
How does the action of the market indices's play into your decision making as to whether or not to put on a trade? For example if the $comp has been falling but is
now at a major support area will you hold off on going short on say Intel when it appears to be breaking down out of a base? Do you check where the appropriate
indicies are, or apprear to be heading, before putting
on a trade?
Joe
Jamie - To follow up on my previous post - the market ($COMP) turned at about the same time you put your trade on for ADSK. Were you watching any indices's before putting on this trade?
Thanks in advance for your input.
Joe
Joe,
Yes I watch the futures and the $comp S/R to guide my trading. However, I did not short INTC on breach of support at $26.50. The reason is that the 20 ema was too close and would likely serve as support. I went long mid afternoon when it recaptured the base - entry $26.51. On 15 min. I saw an inverted hammer which was confirmed on the next candle. After that I placed a buy stop order which was filled a while later.
I don't like to short the stronger stocks, I just wait for them to reverse and go long. INTC guidance was in part why we gapped up so much this morning.
nice cojones trade. That 20 ema sure looks like nice resistance.
Joe,
Yes. But I have to add that I was feeling the fade even before the market opened. Futures peeked and started ticking down prior to market open. Most of the gap up stocks started printing red OR bars. Then we consolidated, attempted to sprint, but did not test ORH prior to midday fall.
Thanks 00NR7. Cojones - cause I didn't wait for price to fall back below 5 ema. But I used the rule of 3, - f the third test of resistance doesn't break, adios.
Edit f = if
Jamie,
Thank you for your input. What futures and their associated symbols do you follow?
Joe
wonderful blog Jaimie.
MSFT was a decent gap up trade. It almost made it to the 38.2% retracement and provided a very low risk entry.
Joe,
NAZ = NQ
S&P = ES
NYSE = YM
Thanks Hadman,
Nice trade with MSFT.
yes, thats a nice back-to-the-wall trade. nice trade - pretty much goes your way right from your entry.
Jamie,
FXI is on the run lately. I've been watching it. Today it gapped up and pull back to 5EMA on relatively lower volume. I had wanted to go long on break of 8th bar high on the 15 min, but noticed the 8th bar volume is quite weak and aborted the idea. Yet it turned out well. Was I too paranoid about the volume?
YR
QQQBall,
Yes, this trade was in the green right out of the gate. Like I mention in the post, wish I could find one a day like this.
YR,
8th bar looks like NR7 which resulted in a nice expansion. Deceiving because the bar doesn't look narrow as it is developing, however, from a visual perspective, after the fact, it looks like one of the narrowest bars up to that point.
Jamie,
Nice...amazing how "beautiful" patterns attract short/long $. HMIN another example. Traded ACH 20/15 FTEK 8/15 for food money and CNTF 9/15 loss. Bet all those subprime support co's like jpm ba c mer bsc etc are pumping up this market to regain their big losses. Some of those big cap China stocks momo'd at the open: lfc ptr chl fxi(Briefing). 20 on my China WL >6%. Wonder if the Chines mkt is up today will Chinese adr's be up Thrs... correlation?
Thanks Jamie.
It just occurred to me to clarify the definition of NR. NR bar has High-low range that is smaller than previous bar High-low range?
Something on candlestick...on a downtrend, we see an inverted hammer and then a doji that closed above the inverted hammer. Is that still a valid reversal sign since we are now seeing a doji?? THanks
YR
BL,
Not sure if Chinese stocks will follow-up tomorrow. But if market rallies they will no doubt participate. Today's late day bounce foreshadows further upside tomorrow, notwithstanding more bad news.
YR,
NR7 is narrowest bar in the last 7 bars. Does not have to be inside. Ideally, NR7 has the lowest volume as well. Price and volume contraction before expansion.
Doji would be one of the weakest confirmation bars, but still confirms. However, if it closes one penny above, I wouldn't put too much at risk.
BL,
I noticed several big name semis gapping up this am - AMAT, MRVL, SNDK, NVDA as well as INTC. I'd like to see some follow thru as this sector has been lame of late.
Jamie,
10-4 on the semis this am. noticed premkt they were up to. always good to pay attention to the others in the group like subprimes with rdn tma mtg pmi . Sympathy plays for Thrs: amzn pcln...
Post a Comment