Monday Nov. 19th - DISH caught my eye from the Briefing.com gapper list because it's also a WL stock. It gapped up on an M&A chatter and carved out a WOR with a long upper shadow. Price held support of the 200 SMA (red line) as it consolidated sideways in the upper half of the OR. As price and the upward sloping 5 period ema came together, it printed NR7 (price and volume contraction ahead of expansion). I entered long on a B&B setup above the blue line. I moved my stop up aggressively in order to preserve profits and I was stopped out on the first sign of weakness.From the 5 minute chart below, notice how DISH carved out a higher low on the second pullback from the base.
3 comments:
Hi Jamie !
From the DISH chart (15 min), fourth and fifth bar look like a confirmation for 2-bar inside on declining volume, correct me if I wrong. So, when we look at the fourth bar jumping over the open close of the first bar, it looks as a good entry point. However, after a few minutes we see that it was a fake break out and we've found ourselves in the consolidation proccess which finally generates the base and narrow bar. If its true why you did not enter in the fourth bar ? if not could you please explain what I am missing here :)
thanx a lot !
Kogi
Kogi,
On the fourth bar, price is too far from the rising 5 period ema. You have to develop very precise rules for entry and exits. If price is far from 5 ema on entry you have to be prepared for a wide stop because price and the ema are like magnets, they always find each other.
I noticed that Trader-X always entered when price and the ema were very, very close. I believe this is one of the secrets of his success.
Jamie !
thanx a lot for the clarification !
Kogi.
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