NIHD started the session off very weak and after basing at S2 it set up a dummy short. Took a partial at $67 on the third WRB and I was stopped out on the balance on the next stick.Initially had planned a long on NIHD because the volume pattern looked bullish. The 7th bar hammer was another indication for a long entry. However, just as I was scoping out a good B&B setup on the lower timeframe, it decided to go south instead.
I felt there was a lot of volume on the bounce from $67.00 and decided to take it long when price crossed the intra-day PP. I was going to take a partial at S2 but the stock was just starting to feel really strong and orderly so I hung on until price approached the morning swing high.
It feels that after all this selling NIHD is finally ready to bounce from this level. As you can see from the daily time frame below, the base of the August hammer low held as support today. If price can take out the next swing low marked by blue line, I think NIHD has a good chance of rallying back to $75 resistance.
SIGM was a C&H B&B pattern. It did not consolidate much as the handle came back up to the base, however, it did consolidate for an hour or so after breaking out. I actually prefer when price consolidates at the base prior to breaking like ADSK on Friday. That way you can expect a much faster move up. The consolidation was orderly so I stuck with it.
10 comments:
Belated Happy BDay Jamie
stud trading jamie - excellent flip on NIHD. MAR did a similar move on friday at the 1.618 extension from friday high to 30-min low on friday.
almost forgot - Happy B-day.
Hi Jamie,
NIHD is a tough call, I would probably not go for it as the 3rd & 4th bar printed strong bullish volume while the next 3 bearish bars printed low volume. And then there is a hammer with the next NR bar having strong bullish volume. But nice one one the way up. Where did you place your stop?
How much weight do you give to volume reading when trading? I noticed a high bearish volume for the hammer on the handle portion for SIGM.
Can you have a look at COGN? Which would have been a more appropriate entry on 15min: break above ORH or break above 4th bar hammer high? Thanks
YR
Thanks QQQBall
MAR on Friday - OR just above support and bounced on big vol.
YR (if I may jump in here),
Give a bit more consideration to the volume patterns you are describing.
NIHD: Yes, bars 3 & 4 do show bullish volume with good price movement. However, the low volume hammer (bar 7) should have been higher volume if bullish - it takes volume to form a good tail. And, the high volume "bullish" NR bar that follows the hammer is not-so bullish. Why? Because the high volume should have produced upward price movement. It did not. The NR implied a struggle and an indecision point. So, the volume pattern in bars 7 & 8 did not confirm the upside. The range contraction led to another down swing, which Jamie traded.
SIGM: Likewise, the high volume in the hammer (bar 11) is bullish, even though the bar may have closed red. Again, the high volume helps forms the tail of a hammer. Go down to a 5-min chart to see more volume detail.
COGN: BO of 15m bar 9 was a great entry point. Low volume pullback following OR BO.
YR,
Agree, the volume was implying a bounce and I was looking for a base from which to go long, but it was still carving out lower highs so the bears were still in control. I thought the hammer was a head fake and it would rally from there. But head fakes or failed BOs usually result in fast moves in the opposite direction. No fast move here, it just traded NR sideways on S2 and fell back below it.
Volume carries a lot of weight for me. But price is more important.
Big volume on SIGM hammer is actually a green bar if you look at 5 min. timeframe. Big volume on the last bar of a retracement is a good sign because it means that all of the weaker hands have been stopped out.
COGN - Price is still quite far from 5 ema on both of those sticks, but if I had to pick I would go with hammer because previous bar is inside inverted hammer, 4th bar confirms bullish.
Good points Jim.
YR, stop is 2 cents below trigger bar around $68.50
Thanks guys, I have a better understanding now.
YR
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