CSIQ, from the watch list, gapped up on higher oil. On the 15 min. time frame we see that 2/15 carved out a bullish hammer at the base of the ORH. It's not a wide gap so the the rising 5 period ema is in close proximity. When price takes out a green hammer at the base of the ORH, it usually means instant gratification.And why not, look at the beautiful base on the lower time frame below. Notice how price retests the pp (second blue line) after taking it out. A successful retest is a sign of strength and adds to confidence in the trading plan.
The next chart is a wide view of the 30 minute chart to show how I determine the pivot points (blue lines).
Going back to the 15 minute chart, my exit strategy is a partial after three WRBs or the upper pivot point, which ever comes first. The thinking behind 3 WRBs is that it is unlikely that price can maintain a vertical move beyond 3 WRBs without pausing for a period of consolidation or retracement. If the PP is near a whole dollar figure, I usually exit as price approaches the whole number as I did here.After taking a partial I waited and tightened my stop just below the next consolidation, inside bar. It held for a long time.
Other non-gap trades:
RMBS - 2 NRIBs on daily - failed ahead of earnings.
VMW - rallied up to gap resistance, attempted to start a gap fill but failed. I was hoping for a short squeeze on a partial gap fill.
HANS - misguided attempt at bottom fishing on the daily time frame.
4 comments:
I like the CSIQ trade and how you caught the big, expansive move (I am really anxious to start catching them myself). It is also very useful to see how you draw the PPs and the notes on the daily charts for the other trades.
It was a good trading day for me also.
Thanks.
anarco
Anarco,
Nice short on CAL. I missed that one, but I also like to short airlines when oil rallies.
Jamie,
Is the 3 WR bars with respect to 15min or 5min? Thanks
YR
YR,
You can use it on either, for example if you trade of of 2 NRIBs on a 5 minute chart, then you can exit (partial) after 3 WR 5 min. bars, or the next resistance level, which ever comes first.
My personal feeling is, the longer the time frame, the more meaningful the setup. But I often drill down to the lower time frame to find the best entry and then go back to the longer time frame to manage the trade.
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