Tuesday, January 15, 2008

Pivot Point Trade - Continental Airlines, Inc. (Public, NYSE:CAL)

The 15 minute chart above highlights the pivot point base developing intraday. I mapped out my Fibonacci extension lines last night (from yesterday's low to the PP base), and set my target at the daily down sloping 50 day SMA. Oil opened sharply lower this morning so I used the lower time frame (3 min.) to pick my spot. I was lucky enough to get 2 inside bars in the upper portion of the 3 min. OR (opening range). Long on a break of the second bar high. I took a partial after 3 WRBs (wide range bars) and exited the balance as price approached my target.

As you can see from the chart below, price extended 1.38% of the distance from yesterday's low to the PP base in just one hour. A nice way to start the trading day!




The daily chart below shows how nicely synchronized the setup was with the 50 SMA and November pivot lows in perfect harmony.





7 comments:

Anonymous said...

Nice one Jamie! Question: On shorter time frame, you mostly use 5min, but I know on a few occasions you use 3min. When do you use which?

Can you have a look at OIH? Pivot point at 179.3, any low risk entry possible?

THanks,
YR

anarco said...

Beautiful trade. Congrats Jamie!
I would like to ask you:
1. When you prepare for the next day session, do you usually look at stocks in both 15 min and daily chart? I guess I am curious about your prep work.
2. For the CAL trade today, how did you "know" it would rally in the morning? What were the clues? Was it mostly the consolidation taking place at the confluence of those MAs with the PP?
Thanks in advance!
anarco

bl said...

Beautiful catch! First time I've seen 3" chart, 1: w13 and 50 ema's looks good. 2/5" ib looks good

Jamie said...

Anarco,

I look at the daily charts of my watch list. If the daily looks good, I drill down to the 15 min.

In the case of CAL, it had signaled a reversal on the daily when I traded it last week (high volume WRB), so I was on guard for continuation. It's very important how the stock closes on the 15 min. This often gives direction for the next morning if it closes near the high/low of the session.

Also price to needs to consolidate after a big move so we had to NRBs in the upper range on the daily time frame. CAL was textbook and of course lower oil played a big role in the move.

When a stock bases at the PP in an orderly fashion as CAL did, keep it on the radar and wait for the low risk setup.

anarco said...

Thank you very much Jamie!

Jamie said...

YR,

I use the 3 min. and sometimes 1 min. when I'm looking to get in early - first half hour of the trading day.

OIH - Break of 15 min. ORL using 5 min chart, 10:40 bar. The PP was retested during lunch so you would have to partial out after a 1 pt. gain.

Closet Daytrader said...

Thanks Jamie for the lesson. Thanks to all who commented. You got a log of my questions answered. And of course, thanks to Jamie again for answering all their questions.