HANS tried to bounce following a weak open but couldn't close above the down sloping 20 period ema. After a full retracement back to the ORL, it consolidated sideways and eventually set up a low risk dummy short following 3 inside bars. On a choppy day like today you don't want to take anything for granted, so partial out at obvious S/R levels.My target was S1 and I covered the balance as price approached that level. The markets finally bounced in the last hour and HANS was good for another 45 cents.
TBSI was a failed C&H pattern that just couldn't close above $35.50.
The daily chart for RIMM is very orderly and easy to read. The two blue lines are S/R pivot points. The red line is the broken trendline. After gapping up above the trendline, RIMM closed the gap from early January, carved out a tweezer reversal, and retraced to retest the trendline.
After three consecutive down days, I was waiting for price to bounce on the tag of the lower pivot point. That's exactly what happened late in today's session. as depicted on the 5 min. chart below.
Now, I'm expecting RIMM to move higher, notwithstanding any unfavorable news or analyst downgrades.
15 comments:
Hey Jamie can you explain the "obvious S/R points" on HANS. I see the the dotted blune line (S1) as an obvious support but what make the upper blue line obvious (visual inspection?)
Also after the 3 inside bars what is your actual entry point? Do you enter right when that 4th bar breaks the support? What is your stop limit at in this instance?
Hope I did not overload you with too many questions. Thanks.
Anon,
The actual S/R lines derive from the daily chart and yes, they are visual in a way. But if you go back to the gap up on 2/19, you will see that after gapping up, price retraced to test support at $41.00 and the high of the previous day was $40.25. Even though the gap was filled on Friday, those pivots are the most recent S/R points and so they are still in play. Probably easier to see if you look at a multi-day, wide range view of the 15 min. timeframe.
I've adapted the upper blue line to fit the intraday consolidation points. So when price retested the ORL it paused at $40.92. The next bar low was also $40.92 so after a second inside bar, I set my sell stop order at $40.90, two pennies below the support level.
The stop is the red line segment. I use the previous bar high as my stop plus a few pennies as a margin of error. I don't move the stop until I see that the BO is working. In this particular case, it was clear fairly early on that I had a winner. The BO bar closed almost on its low which for me is a key success factor.
Hi Jamie,
Even though HANS is a watch list stock were you concerned about the relative lack of volume for the day? I feel like I'd be afraid of a lack of follow through on any moves. Thanks.
Hi~
It was a choppy day indeed!
I traded RIMM today and I have a TA question related to that trade. I interpreted the sequence from bar 4 to 12 in the 5min chart as a bear flag. I entered when bar 13 broke the flag and exited at $100 which was the ORL (15min chart), round number, and a major support area. It was a quick scalp that worked OK. But I am curious: is it correct to think about that sequence of bars as a bear flag? Or do bear flags need to be shorter in length than the downside movement that precedes them? This one almost looks like a V formation.
Thanks in advance.
Jonathan,
Compared to Friday's volume, it was a slow day day, but it seems on par with last couple of weeks. I agree that it's easier to gauge what's going on when you see clearer price/volume patterns, but HANS usually delivers when it comes to NRIBs.
Hey Anarco,
I don't see a bear flag, because if it was a flag, it would look like a flag on the 15 min. as well.
I see a bullish tweezer bottom reversal at $100.00, followed by a 62% Fib retracement from the ORH. Price rallies towards down slopiong 20 ema, and then reverses under pressure.
Tweezer tops and bottoms are relatively reliable reversal patterns especially when they have the exact same high for tops and low for bottoms.
Yup. The tweezer bottom is very clear in both the 15min and 5min charts.
Thanks for the explanation.
Anarco,
RIMM was tweezer-full today. Notice that it tweezered twice off of the big round number (100): perfect tweezer on the first and a 1 cent delta on the second. Following the second tweezer, RIMM rallied back almost to the 50% level of OR and put in a 5 cent delta in highs. A 5 cent delta on a $100 stock is still close. All this is basis a 15' chart.
Jamie,
How do you get your moving averages to draw behind the candles ? I've tried un-checking the "draw lines on top of price" box, but it only works for trend lines/horizontal lines etc.. Are you using eSig 10 ?
Thanks
Anon,
Last night I used my laptop where I'm running Esignal version 8.0. My desktop has Esignal version 10.0 and the MAs are on top of the candles as you noted. I checked the settings for both versions and they are identical, so I guess it's built into the software.
Jamie,
Can you have a look at AEM yesterday? 2 setups I see here and would like your thoughts.
First setup: short on break of 5/15, which is a 2nd IB. The series of shooting stars also strengthen the case. Question: When you talk about trading IBs, do you only take it in the direction of the gap or trend? Or as long as it breaks in whatever direction of IB, you'll take it?
Second setup: Later in the day, it formed a C&H. Where do we take the base of the C&H? $71.21 (1.45pm 15min bar high) or $71.05 (3/15 bar high). As the break happened late in the session, would you have entered? Would you have held it overnight?
Thanks,
YR
Anon,
Getting back to the lines running through price. I have three computers, two of which run on XP and one on Vista. I have three versions of Esignal: Version 10.0 Beta runs on XP, and version 8.0 runs on XP, neither of which show lines running over price. The most recent version 10.0 full release runs on Vista and it has MA and pivot point lines running over price and it is quite annoying.
Just wondering if it's an ESignal problem or a Vista problem, or both? That might sound naive, but I don't have a tech background. Any thoughts would be appreciated. Thanks.
YR,
First setup is okay, but remember that ORL will act as support, so if the risk/reward meets your criteria it's fine. In this case the shooting stars make the setup. I wouldn't just trade against the trend if I saw a red IB which closed on its lows.
Second setup is not a C&H. Handle dip is too low and on higher volume. One of my criteria is a volume dip as the handle forms.
I would say that it reversed and found support at R1. You could have entered above the 3:00 bar, or wait for a B&B above the whole dollar number.
Jamie,
Ref: ESignal or Vista problem
It is both in that the combination of ES10 running under Vista gives different behavior than ES10 under XP. Many software applications behavior differently under Vista versus XP. You can't really say whether the problem is with the application or the operating sys (OS). The problem (probably) is that ES10 has not been fully tested and tuned for Vista nuances.
Related question: Are you running 32-bit Vista (Home or Business) or 64-bit Vista (Ultimate)? More programs (particularly low level software drivers) have "caught up with" and work fine under 32-bit Vista, but still do not work properly under 64-bit Vista.
Thanks Jim,
That means there's hope that it will get resolved over time.
I'm running 32-bit Vista Home Premium.
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