ACI from the Briefing.com gapper list, was an analyst downgrade. The first chart is the daily chart with pivot point. In analyzing the setup, I surmised that the 20 day EMA was a suitable target because there was no support between it and the daily pivot.
The next chart is the 15 minute time frame which started to look very interesting as price and the down sloping 5 period EMA started coming together. There was a clear bear flag developing at the base of the daily PP (blue line). IMO, the best setups take place at, or very near their pivot points/support/resistance levels. However, because bulls and bears defend these levels, we have to be especially cautious of the head fakes.The last chart is the 5 minute time frame which shows my entries, initial stops, and exits. Short on break of the bear flag with a partial as price approaches the ORL. After the partial I tightened my stop to $49.00 to give it a little room. Price consolidated sideways for an hour or so before the last swoon towards my target (lower blue line). The volume spike on that last leg lower foreshadows the end of the move.
As you can see from the charts, ACI carved out a bullish tweezer bottom at the target which kept me interested in a possible retracement trade. A while later it printed a perfect green hammer on the 15 and a B&B setup on the 5 min. I took the B&B long and set my prelim target at the down sloping 20 EMA on the 15 minute time frame. The 5 min. printed 3 WRBs as price rallied into the target. I placed a BE stop on the balance and waited to see if the 20 EMA would hold as resistance. After a retrace, price continued higher, eventually reaching the original BO point.
It doesn't get much better than this as far as symmetry is concerned. Study these charts for future reference and have a great long weekend!
Finding the Daily Pivot Point
In response to 00NR7, here is a chart that shows how I find the daily PP.
Click on the chart to enlarge
18 comments:
great analysis. I was greedy and paid more attention to the fib. ext. from yesterday's high. Question: how do you calculate the daily pivot points?
Hi Jamie,i have a question for u,when u decide to take a pertial & when u close ur total position?good trade.
very nice trading in ACI. how often do you find these gaps with bull/bear flags?
King Jamie, could you pls explain the bear flag pattern ? You use it frequently. When i tried searching for more info, all i could find was ascending-trianlge pattern , but that's bullish not bearish !
thanks
Jamie,pls.ignore my question. I was searching for "triangles", not "flag". I understand it now!
Jamie, write a book, seriously!
Nice trade. I love the way you choose your exits. My best trade so far happened to be with ACI also on the 12th when it was just tanking.
A master trade!!!
No doubt I will study this chart and save it in my "cool charts" folder :-)
Thank you.
Nice trade.
On the 15min it's like a TraderX type setup ?
Hope you don't mind me mentioning here, but I have started my own blog, so if you and your readers have time, let me know what you think ? It's mostly all TraderX type trades. I'm still a relative novice with regards to trading, so would welcome any input.
http://traderam.blogspot.com/
Many Thanks
Would you short again at $50.05?
Not a bad site at all, nice analysis.
I would like to share my blog with you:
http://hedgeagainstspeculation.blogspot.com
If you would like to exchange links that would be great.
Leave a comment on my blog if you`re interested.
00NR7,
Thanks, I've updated the post to show how I find the daily PP.
PRD,
I decide to take profits at key technical levels such as the ORH or ORL as well as PPs. In the case of ACI, I used the 20 day EMA because that is a key level of support when a stock starts breaking down.
Ainkurn,
Thanks, I find these bear flags more prevalent when the whole market is feeling bearish and 80% of my watch list is printing red ink.
Appreciate all of the feedback guys!
Traderiam and Richard - I like the new blogs.
Anon, Too soon for me to commit - ACI ended the day on strength and may attempt a gap fill. I will add it to my watch list and hopefully get a few more trades.
As far as taking profit on the short side of this trade, by my charts, the pivot S3 from 02/12 was $47.12667. Five minute parabolic SAR led you right to it. Oh well,twenty day EMA, pivot S3, I guess the math is all related. Same ol',same ol', S&R.
Anon 5:16
Anon,
S3 from 02/12 is irrelevant. I could say the same thing about S1 from 02/08.
As far as the 5 min. parabolic SAR. Yes, it led you to it, but well after the fact.
The daily 20 ema was my target as part of my trading plan. Price could have overshot it, but it was so close to the whole dollar figure ($47.00) that I didn't think it was worth trying to get a 10-15 cents more and get stuck exiting after buyers start stepping in. It's best to exit on strength.
Jamie- I know you had mentioned that you watch the futures while you trade. Which chart do you use and how do you utilize it?
thanks, gary
Hey Gary,
I use NQ Globex and ES Globex. I like to watch the futures in pre-market and intraday to see how they react to economic data.
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