Last night I posted the daily chart of GRMN, highlighting the bullish rounded H&S, or C&H pattern. I also noted that there are no shares available for shorting with IB and we could get a short squeeze. Well, the shorts weren't bothered by today's gap up and I certainly didn't feel any squeeze action, but it was a winning trade just the same.As highlighted on the daily, I set my prelim. target today at $55.00 based on the pivot points.
This is the 5 minute time frame with my entry on a bullish flag (pennant) BO.
Once the trade is safely underway, I manage it from the 15 min. time frame, otherwise it's too easy to start taking money off way too early. I would have liked more volume on the BO bar. I started to worry after the second BO bar closed as a shooting star and immediately moved my stop pennies below it. If it turns into a failure, it can reverse sharply, so precautions are necessary.The problem was that GRMN didn't consolidate long enough before breaking out of the bull flag. Yesterday's late session rally plus the gap and the wide opening range, combined, to make a huge move. If stocks don't consolidate enough before breaking out, they pause after the BO and consolidate some more. After a few low volume inside bars, price finally took off as expected and almost reached the prelim. target. I wanted to take a partial as price approached the target, but it stalled and I ended up getting out on weakness.
I placed my Fib. extension lines from the previous day low to the ORH, Trader-X style, and we almost reached the 50% level (matches prelim. target from daily).
Back with more trades later this evening.
6 comments:
Would you mind commenting on how you came up with the prelim target.
Is what you refer to as pivot points the weekly or monthly pivot point formulat? Or is it something you came to by eye?
Thanks.
Hi WSW,
Thanks for the heads up on GRMN last night. I got it today. I entered on the break of the high of the 2nd 15 min candle (an inside bar, and hammer-type, even though it was red). Took partial on Fib exention per Trader X. Took the rest just past it when it felt "sluggish".
Strange trade. I too was worried about the shooting star. It was just a very slow, slug like climb that I expected to reverse at any second. Definitely not short squeeze action. My entry was probably too aggressive, but it worked out okay.
Trader X was right, those Fibs are "magic".....LOL.
Thanks again. Just signed up with HCPG guys as well.
Formerly ADD Trader
The pivot point $55.00 is derived visually from the daily chart.
Jan. swing low is $55.00, March 10 base high, and congestion in early April before it gapped down, tagged the $55.00 area a few times.
The more times a pivot point is hit, the more significant it becomes.
Welcome formerly ADD.
RE: HCPG - Excellent decision, but read their trading methodology as it is best executed on the lower time frames.
Good Trading
Jamie, love your blog. Do you ever talk to Trader-X? It would be great to have him back in the blogging world. Maybe he could do a guest post for you every now and then.
Thanks Roger,
No, I haven't communicated with Trader-X since his decision to stop blogging.
His insights on gap trading are priceless. I'd love to have his comments and critiques. Guest bloggers are welcome here anytime, but he still has his old blog and is free to fire it up anytime!
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