BA was downgraded to sell by GS this morning. A sell rating from the king of Wall St. Broker/dealers is deadly. Traded this on the 5 minute chart as it carved out two IBs at the base of the ORL. I tightened the stop when the second bar printed a green hammer. Price can quickly reverse from the early reaction low and I don't like the first trade of the day to be a loser. I tightened the stop again when price printed a lower low at the blue line segment. My target was the round number $70.00 and it lined up fairly well with the 38% Fib. extension of the previous day high to the ORL as depicted on the 15 min. time frame below. How I DayTrade calls this setup Gap & Go.
9 comments:
I know you generally like to have the 5 ema very close by when you are trading IB's off of the 15min timeframe.
How does this change on the lower timeframe? Shouldn't you want the 5 ema to be very close on the 5min timeframe? What are your thoughts on this?
Thanks
PDT,
You're right, it doesn't change. I prefer to have the 5 period ema in very close proximity to the trigger bar on every timeframe. However, the BA trade couldn't wait. I took a calculated risk based other factors: Extreme volume, B&B, 2 IBs with no overlapping bodies, and the fact that price had already taken out the pre-market low and the daily pivot on a closing basis. The one caveat was the distance of the 5 ema. If the 5 period ema is farther than I like, I know that my BO bar has to be wide to pull the EMA down. If the BO is not wide, I have to manage it very closely because it could turn into a head fake.
jamie,
is thete a web site where goldman calls are posted everyday in the morning.. i checked yahoo but it isn't complete
thx
Every morning 24/7 Wall St. lists their top 10 analyst upgrade/downgrades. There's a link in my side panel.
Great feedback. Thanks.
Thanks PDT. Best to have a checklist of criteria for a successful trade setup. When you compare the real time setup with the criteria , if it meets 80% you can take the trade with confidence.
BA also broke some key support on the Daily which accelerated the move down, alot of Longs jumped ship! Nice Trade!
Thanks HIDT,
Yeah, I noticed the March daily pivot low was taken out in the early going. I guess that the daily support/resistance level is the key to your "Gap & Go" trading strategy?
Jamie,
Sorry, but I can't seem to find the top 10 analyst upgrade/downgrades link on your side panel. Can you provide the link here. Thanks!
YR
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