NXY is on my watch list, a Canadian energy play, with extreme volatility lately. Rumor has it that TOT wants to buy NXY and is willing to play a nice premium. Today NXY gapped down after denying the rumors yesterday afternoon. After failing to break below the ORL, it carved out two hammer reversal bars and printed a NRIB (NR7). My first target was former support, now resistance and my secondary target was a gap fill.The first target was met three bars in. After that, price consolidated inside the WRB and the second target looked attainable as long as the flat 50 MA could be taken out. Unfortunately, the markets pulled back ahead of the FED Beige book and the trade was stopped out. EOD we have a C&H pattern so maybe this one will do something tomorrow.
NRIB = Narrow range inside bar
NR7 = narrowest bar in the last 7 and usually indicates price/volume contraction ahead of expansion.
A bread and butter setup. Preferable to have green inside green for longs and vice versa.
2 comments:
Nice percentage move.
Why did you choose to set the stop below the bar a couple bars prior to your entry bar on this particular trade? I would have been stopped out by a penny.
John,
The graphic is a little off. I entered on the 12:00 bar on a break of the outside bar. When I trade NRIB (NR7), I set both the entry and the stop above and below the outside bar. That gives me the extra wiggle room and avoids unnecessary stop outs.
Post a Comment