HANS from the WL, gapped up and carved out a mini C&H pattern on the 5 min. timeframe. An uptick in volume as price broke out soon waned and gave way to higher volume on red bars. I had a feeling that it would fail due to lack of follow-thru and tightened the stop to avoid a bigger loss.
From failures come fast moves in the opposite direction, or so they say. This failure resulted in a slow move, which eventually set up a B&B short below the blue line and under all three MAs. If you missed that move, you could have easily entered on the bear flag pattern which formed near the ORL. The red line segments are how I trailed my stop. I exited the trade as price approached $41.00 on a surge in volume which foreshadowed the end of the move. I also took a long entry near the end of the session.
8 comments:
Hi Jamie,
Thanks for sharing this trade. This has happened to me many times before, but I haven't been as quick as you to take losses.
Out of curiosity, had you not gone long, would you have gone short at the spot where you covered?
Also, thanks for pointing out the volume spike 'trick'... it has worked pretty well for me in the past.
Thanks,
AJ.
Jamie,
PCU was in my watchlist, but I miss the great move today somehow. On hindsight, would you have endorsed a long on break of 8/15 bar (also break of $108)?
TRA - gapped up above PP of $47.5. Any chance to have low risk entry early in the session?
Please pardon my forgetfulness...i recall you mention that you usually set a buy order 2 pennies above a breakout. Does it include all sorts of breakout e.g C&H, break of flags or PP, NRIBs? Also, is the 2 pennies applicable to more expensive stocks or you use the 0.1% rule?
Thanks,
YR
Welcome AJ,
I can't say that I would have shorted on the failed pattern if I hadn't been long. The market and most of the stocks I was focused on were still strong at this point. It was only after lunch that I decided to focus on weakness.
YR,
I agree with your proposed entry for PCU.
TRA - early entry - break of 7/5 min. after inside bar hammer.
Two pennies is good for all entries. Initial stops - I use previous bar low plus 0.001% of price.
Today's price action seemed very tricky. Days where the market gaps up or down are always difficult in my book. I didn't see any convincing setups. CF looked good in the morning but it didn't have much follow through. Hopefully tomorrow's CPI data will heat things up.
Agree with Rick, I found today tough as well. Only SIGM worked for me.
Agree with Rick and Traderiam. I missed the pre-market and came back to my trading desk shortly after 10:00 surprised to see so many stocks gapping up.
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