Dummy Trade of the Day - Celgene Corporation (Public, NASDAQ:CELG)

When I heard all the gurus on CNBC this morning telling listeners to buy this market, I wanted throw up. When I saw the market gapping up yet again this morning, I was scratching my head.

Anyway, enough of that, I'll cover that in more detail in my NASDAQ post later this evening.

CELG, from the watch list, had a weak open, carving out a WRB (wide range bar) which closed near its lows. It consolidated the early weakness by printing three NRBs in the lower shadow range of the OR - basically three inside bars. I shorted 2 pennies below the first inside bar. As usual, I took a partial after three WR red bars and covered the balance as price approached the next round $ number. If you look at a wide range view of the 15 min. timeframe, you'll see that this area has support from yesterday afternoon's swing low and Friday's ORH.

At this support area, price rversed and CELG carved out a green hammer. I went long above the next inside bar. and took a partial when price stalled at $74.00 which was close to the 38% Fibonacci retracement of the ORH to the morning swing low. Volume seemed to be lacklustre on the move up so I kept a tight stop. When the market broke down in early afternoon I was stopped out and quickly scrambled to get short again. If price can't close above the 20 EMA on these retracement trades and falls back below rising 5 ema, it usually means that the selling will continue for another leg down.

Notice the big volume on the two selling waves and declining volume on the retracement. That is a key part of managing the trade.

Getting into a trade once it has already broken out, is more difficult than stalking it ahead of time as I did with CELG. However, this afternoon's selloff required some fast decisions in order to profit from the explosive move. Hope you guys made a lot of money!