NT was an earnings gap that took out the ORH on the next bar. Eventually it carved out a base & break setup at the early swing high (almost a C&H) and rallied into the close along with the markets. The key take away on this type of setup is the orderly retracement on declining volume and the higher lows leading into the late day BO. After a big thrust like this one on the open, price needs plenty of time to consolidate the move so you need a lot of patience before the second leg up develops.Because of the base, I place my Fib extension from the previous day low to the base as opposed to ORH. The ORH loses its significance once it has been taken out on a closing basis.
3 comments:
jamie: What is the latest you enter a trade during the day? Thanks Raj
Jamie,
Nice work and explanation. Similar pattern: traded GES 15/15" but reversed and stopped out only to zip 1+. Looks like 30" charts work better on long bases/big runnups/short spikes that don't have much of a retrace. fslr 8/30"? Premkt fslr upgrade/news fired up the solars and better trades on the non fslr's: jaso stp tsl. Like the brokers yesterday. C downgrade sent it to the basement. Theme trading can work. Traded CTSH -5/5 for change. Better inside -4/15 IB or -9/15 inverse hammer. Also INFY -19/15 for change too late in the day. Better: -4/15 -2/30. Working on getting the WL small and focusing on it! Work in progress, and I like having the WL before market...more relaxed than having to scramble with Scottrade or TI scan. Best of trades Wed!
Raj,
Don't usually like to enter past 3:30.
Bl,
Another theme yesterday was shorting overpriced internet stocks after the alibahbah debut. YHOO rolled over on the open then BIDU. Best dummy SOHU 4/15 IB.
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