Talked about this setup last night in the comments section. I was targeting a 100% Fib. extension of the ORL to the base (blue line), but it didn't quite happen.
Talked about DLTR in the comments a few days ago. Unfortunately for me, I wasn't able to trade in the a.m., so this one passed me by. Hope some of you got involved.
The main thing I liked about this CNQR gapper setup besides the NRIBs, was how nicely it held the ORH as support on a closing basis. I was hoping for a wider Fib. extension ie. 38% from the previous day low to the ORH, but as you can see from the daily timeframe down below, there was resistance from a pivot area.
17 comments:
do you always use stop limit orders for entry or do you sometimes use stop market. Lately my stop limit orders are getting blown by and I am missing good entries.
awesome to hang in there on the partial candle. thats excellent trading to ride the reaminder back up. i wudda gotten shaken out!
Hey Jamie,
Fortunately, I had a long side bias today. Traded AYI, PHM and HRS - just realized all NYSE.
AYI and PHM had retests contained by 15" 20ema. HRS was a strange one. It tried to go a couple of times, then pulled back to flat base area. I survived because I entered in flat base (not a BO entry), kept stop under 53.85 PP, and exited into EOD rally. However, it drove me nuts.
As you noted, there were some good trades per comments of last several days.
Jamie,
With regards to trading PP and NRIB, if the setup is quite far away from 5 or 20EMA, would you still consider it or its consider higher risk?
YR
CELG is printing a nice cup&handle on the daily after good earnings. Also starting to fill the 12/10 gap.
CNQR, did you enter an order just above the red hammer high? If so would you be ready to exit when the bar you enter didn't closed strong.
Jason,
I now use buy stop (market) for liquid stocks with narrow spreads, stop limit for wide spreads. This works well and I rarely miss a trade, and when I do miss, it means the spread is way too wide.
QQQBall,
I wasn't trading from home today, so I didn't have my intraday PPs on my charts. If I had, I would have exited at R2 $34.90. The final outcome is not too far off, but the pullback following the first spike was painful to watch.
Jim,
Nice work on PHM and AYI. HRS - multiple head fakes - plays on the nerves.
Yes, lots of winners from the recents comments.
YR,
Proximity to 5 period ema is a critical success factor to the NRIB setup. For gappers, 20 ema usually comes into play later in the session. If price is too far away from ema on 15 min., you can try a lower timeframe and set a tighter stop to lower the risk, however, the best setups will be in step on both timeframes.
Good eye PN,
CELG is setting up beautifully as a C&H pattern on the base of a PP. If you go back to June, July, Aug., you will see that price pivoted into the baseline of the C&H pattern in each of those months.
Victor,
Good question. Yes that was the entry, and yes, a strong close on the BO bar is one of my critical success factors on this type of setup. A close in the bottom half of the BO bar on tepid volume, is cause for concern and I am ready to move stop to BE.
Jamie, excellent anlysis and even better execution. I'm considering getting into stocks and this is a style I am comfortable with as a launch-point.
My new favorite stock trading blog.
Thanks LonelyTrader!
Jamie,
The 2nd and 3rd bar of CNQR were Inside+NR7 combo consecutively. Assuming that you were watching this unfold in real-time, why didn't you enter Long when the 4th bar breaks the Opening High?
In other words, what is your evaluation on the first 4 bars setup, as it crossed the Opening Range High?
Thanks!
CDT,
Actually, I didn't trade in the morning, as noted under the DLTR chart.
However, in hindsight, I would not enter long on the CNQR inside bar setup you highlight. The main reason is the distance from the up sloping 5 period ema is just too wide. If I reset my chart to the close of 3/15, I'm looking at a 2 pt. spread between the ORH and the 5 ema.
I'm now using the Trade_Ideas scanner for NR7 and their definition of NR7 is the narrowest bar in the last 7 bars, including yesterday's 15 minute bars. So, in that respect, I would say CNQR had 2 inside bars in the upper half of the OR which is bullish in itself, but no NR7.
Thank you very much for the explanation!
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