Cautious trading following the huge opening gap due to the Fed intervention. JOYG, a WL stock, set up a typical sideways gap consolidation until price and the rising 5 period ema come together. I used a buy stop order and almost missed the exit at R2.
ESRX was setting up as a C&H pattern. I spotted 3 NRIBs and decided to get in early. I took a partial at the 100% Fib. extension from the low of the cup to the base. I didn't see any resistance until S1 so decided to hold half my position. That target was well exceeded on the momentum rally into the close.
I saw many C&H patterns in the afternoon. JASO was quick to achieve the measured move target. This one is a 5 min. chart.
Also managed to catch a sweet move in my beloved RIMM this afternoon!
16 comments:
Like you said, there were many C&H and double bottoms in the afternoon.
However, I spotted 2 in the morning and they didn't work out. Anywhere I've gone wrong?
DRYS in the morning on 5min chart, with base at $64. Where would you have bailed out? Later in the afternoon. it formed another C&H. Would you take the base to be $65 or ORH?
FXY. Also C&H in the morning on 5 min chart, with base about $97.2. Failed. Not sure why.
Thanks,
YR
YR,
DRYS extended 62% and ran into R1.
FXY ran into S2 and the downsloping 20 ema on the 15 min. (50 SMA on 5 min.)
Are you using intraday pivot points on your charts?
Good one on JOYG.
Was the NR7 what made you look into this one? I used Interactive Brokers only so I do not have a NR7 scanner.
Were there any other indications other that NR7 that made you look into this one?
Anon,
I traded JOYG short yesterday and it didn't extend fully, so I was curious to see if it's so strong, if it would hold the gap better than most of my usual suspects. I like the sideways consolidation, but the trigger was the NR7 from the TI scanner.
Jamie, weren't bars 3/15, 4/15 as well as 6/15 NR7s?
If so, why was the 3rd more significant that the others?
The above comment referencing JOYG
Anon,
Yes, they were NR7 but no volume contraction. IMO, a true NR7 includes both price and volume contraction. The other caveat is distance from the rising 5 period ema. After all these are all dojis which signifies indecision so it is riskier and therefore you have to have a good reason to enter the trade. I liked the fact that the 3rd NR7 had the lowest volume up to that point and was inside the previous bar as well as distance from 5 ema.
heck i saw JOYG too but it was too late..
did well on HUM/UNH but left a lot on the table..i need Reverand's tenacity
Thanks Jamie. Are you saying that if a B&B or C&H breaks near a pivot point, you'll give it a miss?
As for running into SMA, wouldn't most of such B&B or C&H run into SMA since they have pulled back and consolidated?
As for DRYS C&H in the afternoon, would you take $65 or ORH to be the entry?
YR
Jamie, Do you scan for inside bars (1 ,2 or 3) or is it a visual inspection?
YR,
I'm going to answer your questions this evening when I get back. Just wanted to mention PCLN which I added to my WL in mid-Feb. after the gap and after you mentioned it in the comments. A big THNX - 4/15 NRIB NR7 = momo.
Anon,
I am in the process of trying to get TI to implement an IB alert in their scanner. Will keep you guys posted if this works out.
I have a question on the JOYG trade. Can you explain why you chose the second bar high as the break out point and not the high of the bar preceding the NR7 IB?
Anon,
Anticipation. Not recommended, your entry is better.
YR,
FXY was a gap fade which means there is a lot of resistance from down sloping ema.especially on the 15 min. timeframe. When price rallies into the downsloping 20 ema and can't close above, carving out a bearish candle, the trade must be aborted as this one of my short setups.
Nothing wrong with the DRYS C&H pattern setup, But if price stalls at the intraday pivot, its time to book some profits and tighten stop to BE.
I'm not saying that if a pattern sets up near a PP to give it a miss. I would have taken the DRYS setup had I seen it, but I wouldn't have lost money on it when it rejected the PP in such a bearish manner.
The FXY C&H pattern is disorderly on both the 5 and 15 min. I don't see a big drop in volume as the handle forms which is an important criteria for the pattern. It doesn't meet my criteria. I would have waited until price closed above the 20 ema on the 15 minute minute timeframe.
My ESRX C&H trade from yesterday ran into downsloping 20 ema but closed on strength. I watched it closely when it tested ema to make sure I wanted to stay in the trade. Not all C&H patterns form from a position of weakness, so no they don't all run into resistance from MAs. JASO is a good example.
I don't see a C&H on DRYS in afternoon - double bottom. Price rallies from second bottom into PP. Wait for price to consolidate the run-up. Long on break of 3:00 EST 15 min. bar.
Jamie,
Thanks for such detailed explanation. It helps to differentiate the setups better.
For DRYS, where would you have tightened the stop?
YR
YR,
If you mean DRYS C&H, I would have taken some off after price failed at whole $ number (say $64.90) and then tighten stop to BE.
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