The first two charts are 15 min. and the third chart is a 1 min. time frame and the last chart is the daily which highlights key support. APOL from the Briefing.com gapper list, opened with a huge earnings gap down. The key takeaways from the first 15 min. chart are that Fib. extensions are often not useful for very wide gaps. Also, the wider the gap, the longer the gap consolidation period, so don't try to get in too early, wait until the down sloping 5 period ema approaches price.
The 2nd 15 minute chart shows how I executed the trade. After breaching the ORL, APOL carved out a tweezer bottom which failed to reverse. Eventually price printed an orderly bear flag pattern comprised of NRIBs. All three bars observed the ORL as resistance on a closing basis. The third bar met the down sloping 5 period ema and closed weak (almost a gravestone doji). I placed a dummy sell stop order a few pennies below the trigger bar and it took a while before the actual execution because price was moving very slowly. The high of the trigger bar is the initial stop ( plus a few pennies).From the daily chart I had established support at $40.00 followed by $37.50. I took a partial at $40.00 and covered a while later as it appeared to be forming a bullish doji morning star. I entered long just before the star pattern completed itself as depicted on the 1 min. chart below.
Notice the perfect double bottom pattern and also note how the 20 EMA acts as support on the 1 min. time frame.
Related Post: Morningstar Reversal Pattern
7 comments:
Forgive my ignorance but the trigger bar you speak of is the gravestone doji right?
If so, didnt the next bar open below the trigger?
The trigger bar is the gravestone doji (12:15 bar), the low of which is $41.82. The next bar opens higher at $41.84. My sell stop order was placed at $41.79 and was not triggered until 12:43 - in the last few minutes of the next bar. That's why I mentioned that it was slow.
Price hovered in the $41.81 -$42.00 range for quite a while, but once it broke that range, it took a precipitous fall.
rev jamie:
that doji on the recovery could well be taken as a sell sign..
anyhoo, why are going to 1 min frame nowa days.. i though 1 min is not that reliable
Jamie,
I understand that you do some swing trading for your longer term account. For swing trading, do you apply the same techniques for day trading as well for C&H, B&B, NRIBs etc?
When swing trading, I presume your main timeframe is daily chart. What's your next lower time frame? 60min? or you don't look at that?
Swing Trade Entry Timing: Do you wait till near the close to see how the stock is closing? Or like day trading, you simply wait for break a certain price + 2 pennies, you'll just go in?
Do you also use the same MAs and EMAs for swing trading?
Would be great if you can share some experience on swing trading.
Thanks,
YR
YR,
Swing trade documented on blog in April 2007 for TODCO (NYSE:THE).
I prefer B&B for swing trades.
Anon,
I use multiple time frames.
Thanks Jamie. I've read the swing trade on TODCO. From what you've got there, you look at weekly, daily and use the 15min for your entry. Is that correct?
But I'm unable to tell the moving averages you use from the chart for swing trading. Pls advise.
Thanks
YR
YR,
Sorry, now I use same MAs on all time frames - 5 ema, 20 ema, and 50 sma.
Post a Comment