Tuesday, January 20, 2009

Gapper Trade - Goldman Sachs Group, Inc. (Public, NYSE:GS)


The $USD spiked higher today. Precious metals also rallied, in an otherwise weak, choppy session on inauguration day.

ABX took out the PDH in early trade and manged to reach the 50% Fib. extension of the PDL to PDH before retracing back to the trendline.

GS gapped lower (place fibs. from PDH to ORL) and couldn't recapture the ORL on a closing basis. After that I waited for a low risk entry as the consolidation range broke down.

I was somewhat pre-occupied with watching the inaugural events on TV, so I exited before the secondary target was met.

4 comments:

anarco said...

When you enter far from the high/low of the previous bar, like in the ABX trade, where do you place your stop?
Thanks!

Jamie said...

Anarco,

I set my stop at $34.81. If you look at the 1 min. timeframe, you'll see that level was the last dip before the BO. When a stock breaks out, it should hold the BO level as support on the retest, if not it could turn into a problem trade. This BO had big volume on the 1 minute BO bar, so I was feeling confident the $35.00 level would hold as support.

yr said...

Jamie,
Would you consider the break of bear flag at around 12pm ET bar for GS a low risk entry? It was unable to close above ORL and when it went above 5EMA on 15min, next bar immediately offset. Thks

Jamie said...

YR,

Offsets are not my favorite trigger unless they occur at key pivot/retracement levels. I always have 3 timeframes going at the same time and I don't see a flag on the lower timeframe.

Offsets can continue sideways for a very long time. Look at 1 minute chart and see all the MAs come together for a kiss around noon. When they start to separate, price dips signaling a continuation of trend. That's a good time to start planning an entry.