Monday, November 03, 2008

Trendline Break - Canadian Natural Resource Ltd (USA) (Public, NYSE:CNQ)

As noted in last night's technical picture post, the market had 4 consecutive higher closes, and I was looking for some pullback as many watchlist stocks were extended. So my strategy was to look for gappers on the open and trendline breaks if they setup in an orderly fashion.

The trick with trendline breaks is to wait for price to test the trendline as support, then if price doesn't bounce from the trendline, look for NR shorting opportunities as close to the trendline as possible. In other words, don't jump the gun, otherwise, you might find yourself in a losing trade. V and CNQ (charts below), stocks I traded long last week, setup perfectly.

The first trade was HIG (chart above), a gapper which I found on the Trade-Ideas scanner and Briefing.com gap up list. Notice the consolidation/congestion where price broke down last Thursday. That area acts as resistance, so you want to enter when price moves into that zone, above the blue line.
I took a partial , but eventually after a shallow pullback, HIG extended 100% from the previous day low to the ORH.

AMP, a stock I traded Friday, is setting up a C&H over the past few sessions. $22.00 is the pivot point. Keep it on the focus list.


6 comments:

Tyler said...

Jamie,

Great trades! I was watching HIG from the start, but did not know where to enter. I am glad you posted a good chart for me.

Thanks,
Tyler

yr said...

Jamie,
How did u manage the stops for HIG? Move it to the lows after each green stick that is not IB and then after partial, you allow for 38% fib retracement of the day's low to swing high? Thanks

Jamie said...

YR,

Yes, watch the 38% retracement of today's range after the initial swing high starts to pullback. HIG stopped right on it and reversed - like magic.

Jamie said...

Tyler,

Happy to help.

stiks47 said...

nice charts,nice trading. for a newbie trader like myself, watching the markets all day, and then seeing what you did in each particular session is a huge help to my understanding of the markets and learning how to trade them

Jamie said...

Thanks Stiks