Trade of the Day - Crocs, Inc. (Public, NASDAQ:CROX)

A disappointing earnings report sent CROX into a free fall. Once it closed below its 200 DMA on the daily, it wasn't able to recapture it on a closing basis, carving out two narrow range inside bars (NRIBs) on declining volume. Despite being oversold the NRIBs in the lower half of the previous WRB were signalling more selling to come - CROX is a WL stock and it was a HCPG pick as well.

As you can see from the 15 minute timeframe above, CROX didn't waste any time on Thursday. The second bar manages to hold support on a closing basis, but the third bar closes into S2 (red line). The fourth bar retests former support, but prints a long upper shadow signalling a failure. I shorted a break of the fourth bar low as the down sloping 5 period ema was in very close proximity. I took a partial after three WRBs and covered the balance after it reversed sharply on higher volume.

On Friday CROX set up another trade, this time a bullish flag BO. I took a partial as price rallied into the down sloping 50 MA and exited the balance when resistance at the blue line held on the first test.

The above chart is the Canadian RIMM chart on the TSE for Thursday which is almost identical to the NASDAQ chart except for price.

I was looking to short on a break of a bearish flag, but it didn't break on the fourth bar as planned so I waited thinking it might print a few inside bars. Instead it went into offset mode which was a bit confusing especially with a green hammer. However, the green hammer didn't follow through and was offset a while later with a red hanging man. I shorted as price confirmed and broke below the hanging man and locked in some profit after three WRBs. The rest of the trade was text book - keep moving stop just above previous bar high.