TQNT carved out two inside bars on declining volume on the daily timeframe above. It was in an established upward trend, so it was just a matter of waiting for price to break out of the consolidation base.
ATHR was an earnings gap from the Briefing.com list. It set up a low risk B&B after consolidating sideways. Also, notice that the bar prior to the trigger bar is NR7 and inside. I took a partial as price retested the ORH. I was hoping for a C&H to develop, but eventually it became clear that it was retracing back to the rising 20 EMA, so I closed the balance of my position.
NVDA, from the WL also gapped up and carved out 2 inside bars on declining volume as it consolidated under R2. I went long on a break of the base and took a partial at $35.50, closing the position on weakness shortly after.
Over the weekend I noticed that I had missed a really nice momo move in YHOO on Friday. Today I was watching it on the open. The OR was wide and red, closing just above support of P. The next bar was NR on declining volume and almost inside. I placed a sell stop just below the second bar low thinking it would consolidate a bit more before breaking down, but it was so weak that it immediately broke out of the OR with another WRB that almost tagged S1. I took a partial on the following bar and tightened my stop. As expected, it consolidated the move over a long period as it traded in a narrow range. Eventually, by mid-afternoon it extended further in my direction. I decided to close the position after it carved out a near perfect green hammer (potential reversal).
CFC was a Briefing.com gapper. After initial weakness, it started consolidating sideways, eventually carving out a flat, narrow base. I entered long after price closed above the base. I placed the Fib extension from the previous day low to the base. As expected price consolidated as it tested the ORH. The consolidation was orderly and price moved higher. I took a partial at the 50% extension and closed the balance when price stalled at the 62% level.
RIO, a gapper from the WL, carved out an orderly base with NR7 trigger bar. I took a partial at the 38% Fib extension of the previous day low to the base as price was close to daily pivot. The next bar was a star so I tightened the stop.
OTEX was a B&B candidate on the daily chart above.
It opened on the base (blue line) and retraced sharply off the open. It then carved out a base at the red line which represents an intra-day resistance level from yesterday. I took a long position on the break of red line and a partial on test of ORH. OTEX eventually carved out a perfect C&H pattern which consolidated nicely prior to the break where I re-entered my original share size. In reference to the trading tip in my last post, OTEX is a good example of price moving into the base and consolidating with a few NRBs prior to the actual BO.
Normal Fib. extension for a C&H pattern is 100%, however, when that level was reached I only had two WRBs on my 15 min. chart instead of my usual three, so took a partial and closed the balance 5 minutes later.
The first chart is the daily time frame for AKAM which gapped up on the open due to earnings. I was looking for a suitable base as an entry point which I identified as the August swing high (see blue arrow) and then plotted the blue line on the lower time frame to see how price would react.
After consolidating the gap briefly, price moved back to the blue line. On the 5 min. time frame, we see that it did this on a WRB. I waited until price broke out and consolidated above the line and then took a long entry. I took a partial at the 38% Fibonacci extension of the previous day low to the base (blue line). After that I was looking for a normal retracement of 38% from the morning low to the swing high.
AMZN gapped down on a disappointing earnings report. I entered short on a break 6th - 5 min. bar low and covered when price approached the 38% Fibonacci extension of the previous day high to the ORL.
BRCM also gapped down on disappointing earnings. It spent most of the morning consolidating the gap in a sideways trade, printing a number of doji sticks. Since dojis represent indecision, I decided to place a sell stop order below the base. After triggering, if fell but attempted to reverse, carving a bullish morning star and I was just about to close the trade but the morning star didn't confirm and price started moving lower, so I stayed in.
AKAM was a bearish flag breakout - weakness ahead of earnings. I took a partial after a 1 pt. gain and folded shortly after. I don't like to overstay these pre-earnings trades as they can be extremely unpredictable.
AMZN gapped up on the open and carved out a flat base following the 15 minute OR. These flat base breakouts can be very powerful even though they are extremely boring to watch, stick after stick. I waited for price to break and then consolidate the break as can be seen on the 5 minute time frame below. I managed the trade on the 15 minute time frame and closed the position after three WRBs. I place my Fibonacci extension from the previous day low to the base as opposed to the ORH. Price reached the 62% Fib. extension on the third WRB.
The NASDAQ provided leadership on today's modest recovery attempt. Still after the first thrust from the opening gap down, it felt uninspiring. Will AAPL's blowout earnings and increased guidance provide impetus to more bullish developments tomorrow?
HANS gapped down on the open and was quickly met by bargain hunters who managed to push price back up to Friday's morning swing low. HANS could not close above resistance and it carved out a NRB as price fell back under the 5 period EMA. This set up a dummy short. At first I was planning to take a partial when price retested the ORL, but when I saw the volume spike on the second WRB, I decided I would fold as this spike implied capitulation.
ABX gapped down on the strength in the US dollar. It set up a dummy short after it failed to close above down sloping 5 period ema at the base of R2 (red line). Here again, I wanted to partial out at the retest of the ORL, but the lacklustre volume accompanying the move down, forced me to fold.
MTW was a forced trade based on a low risk entry. If you look at the daily chart, you will see that it was due for a bounce. I quickly scratched the trade when after breaching R2 (red line), it popped right back above it.
Prior to Friday, MDR had carved out two inside bars as highlighted on the daily chart above. Notice the price and volume contraction on Thursday - NR7. Also note the rounded top which generally signals too much supply. Every time buyers try to push price higher, they are met by an over supply from sellers.
CIEN breached support in the morning and came back for a retest. The retest formed a perfect bearish flag - another invitation to short. Notice how price cannot close above the down sloping 20 EMA on the retest.
This ADSK gapper short trade is fairly straight forward. In fact, I wish I could fine one like this every day. ADSK was on the Briefing.com gapper list. The ORH lines up nicely with yesterday's pivot low. After trading sideways for over an hour, ADSK finally sprints to test the ORH, consolidates and makes another attempt which fails. The down sloping 20 ema is just above and the NR7 bar is a perfect opportunity for a dummy entry short. The initial target is R2 because it lines up nicely with the ORL. Everything about this trade is symmetrical except the final exit which felt like the end of the move.
Will INTC and YHOO earnings get buyers back in?
BIIB gapped down and traded in a NR just above yesterday's swing low for most of the morning. During lunch it started to make a move lower so I took a dummy short. I took a partial as price approached the morning swing slow and I was stopped out on the balance.
AMLN took a dive when the FDA issued an alert on its diabetes drug Byetta. After price stabilized mid-range, I was hoping for a low risk entry and more weakness into the close. Found a low risk entry, but the weakness held the lower end of the mid-range.
ADSK tried to bounce after some early weakness, but only managed to retrace 32% of the move from the ORH to the third bar low. It carved out two gravestone doji sticks (2nd inside) just as the down sloping 5 period EMA was making contact with price. Short below first doji low. The BO bar closed near its lows. This was followed by a retest of S1 before the selling really got underway. Partial at S2 and stopped out shortly thereafter on a midday bounce.
Higher oil always almost always hurts the airline sector. Initially CAL looked like it was forming a bearish flag, but it didn't really get a chance to develop. I shorted as price fell below the real body of the inside green hammer and covered as price retested Friday's low.
I've just added two new names to the watch list - BRCM after it broke out of a multi-month base and COGN after a high volume earnings gap. Both charts are still bullish. BRCM formed a cup & handle pattern. However, it consolidated the BO for 30 minutes before ascending so the move didn't really get a chance to expand fully before the end of the session.
The NASDAQ snapped back quickly on Friday following Thursday's sell-off. The key catalysts were a benign PPI inflation reading for the month of September, as well as favorable retail sales, and the real kicker was tech M&A with Oracle's (ORCL) bid for BEAS. However, the early bounce was followed by a narrow range chop on much lighter volume to end the week. Advancers outpaced decliners (1841/1120) with new highs outpaced new lows (103/67).
AH closes at $81.60
| On Wednesday and Thursday retailers reported September Same Store Sales. Here is a summary of which co's beat/missed by the most, and how their stocks subsequently reacted. The co's that beat September Same Store Sales ests include (listed according to the magnitude of the beat): Buckle (BKE) +10.9% vs. +2.0% consensus, stock gapped up 2.1% to open at $38.93 and closed up 8.4% to $41.34... Zumiez (ZUMZ) +13.9% vs. +6.3% consensus, stock gapped up 9.3% to open at $51.80 and closed up 6.8% to $50.63... Deb Shops (DEBS) +3.8% vs. +1.0% consensus, stock gapped down to open at $27.11 and closed down 0.6% to $27.05... Stage Stores (SSI) +2.3% vs. +0.0% consensus, stock gapped up 2.1% to open at $18.10 and closed up 8.4% to $19.01... BJ's Wholesale (BJ) +3.9% vs. +2.0% consensus, stock gapped up 0.6% to open at $37.34 and closed up 0.3% to $37.22... The co's that missed September Same Store Sales ests include (listed according to the magnitude of the miss): Cato (CTR) --7.0% vs. -0.8% consensus, stock gapped down 2.8% to open at $20.01 and closed down 7.4% to $19.06... Sharper Image (SHRP) -21% vs. -13.3% consensus, stock gapped down 1.3% to open at $3.70 and closed down 12% to $3.31... Bon-Ton Stores (BONT) -7.1% vs. -2.0% consensus, stock gapped down 0.7% to open at $22.88 and closed down 2% to $22.59... J.C. Penney (JCP) -4.6% vs. +0.0% consensus, stock gapped down 5.0% to open at $64.59 and closed down 7.0% to $63.27... Stein Mart (SMRT) -9.1% vs. -4.5% consensus, stock gapped down 0.6% to open at $7.64 and closed down 4.0% to $7.39. |
| Stocks over $5 posting the largest percentage gain over the last five sessions include: STV +70.7%, CTEL +70.2%, SFBC +62%, HLCS +45.9%, QXM +42.5%, SEED +40.4%, BEAS +33.6%, HSWI +28.5%, NINE +27%, LLNW +24.3%, AXR +23.9%, VSEC +23.6%, MNG +23.5%, LNOP +23%, HIHO +22.9%, GSOL +22.7%, PARL +22.5%, MTL +22.3%, LONG +20.9%, DRYS +20.8%, JADE +20.7%, TBSI +20.6%, XIDE +20.4%, BAGL +20.2%, BZP +20%, ESEA +20%, GROW +19.7%, GMO +19.6%, GVP +19.6%, PRGN +19.1%, MTRX +18.6%, VNDA +18.8%, SLRY +18.8%, MBLX +19.2%, BCSI +18.4%, FREE +18.4%, WX +18.2%, ADY +18.1%, GIGM +17.9%, MOS +17.7%, EXM +17.6%, ASYS +17%, BOBJ +17%, AKAM +16.9%, NGPS +16.9%, MEE +16.7%, YTEC +16.8%, SCOR +16.8%, CSUN +16.2%, ANPI +16.2%, ANW +16.1%, SA +16.1%, SNP +16%, COGN +16%, VC +16%, ABM +15.8%, XING +15.8%. |
