Thursday, February 05, 2009

Earnings Gap - Visa Inc. (Public, NYSE:V)



V was an earnings gap but was too far extended and couldn't break through $55.00. The sympathy play was a better trade with MA.

Shorted V because it formed a perfect triangle on 1 minute chart. The short trade was more satisfying than the long.

8 comments:

Susan said...

Nice reversal trade Jamie. I was watching V for ORBO setup that you normally take but got caught up in some other trade. What was your initial target in the V reversal trade?

Jamie, can you pls. take a look at today's BGZ 5 min. and 2 min. chart from open till 10.45 to see if it formed a H&S. The volume in head was much than what I would have liked. I am just learning how to see patterns and am not taking any trades based on these patterns right now.

Susan

Jamie said...

Hey Susan,

The target on the V short was the R-zone of the day's trading range but it didn't quite make it. The way it closed - bearish flag - leaves the door open for more pullback tomorrow.

I didn't post my ORBO trade today. It was SQNM, which formed a C&H after gapping lower. It's trading in the daily spot, so has a better chance of forming an orderly ORBO. That is my only biotech stock that's performing badly, so I was expecting some sort of bounce after all this selling.

It's harder to see textbook volume for chart patterns in early trade because of the higher volume in the first hour. But BGZ does look like a H&S top.

PDT said...

Hi Jamie.

For V long what did you use as your stop? Thanks

Jamie said...

PDT,

$53.60 which is the lowest low in that narrow trading range preceding the BO and PBL on 15 min.

OONR7 said...

Beautiful play on V. Wish I would've caught the move down as well.

Jamie said...

OONR7,

Yeah, the cursing quotient on the second half of my V long was getting out of hand on the dips. So I had a pretty good idea this was going to roll over.

Susan said...

Jamie,

Apart from the lower highs and higher lows, do you take volume into account? Higher volume should ideally follow on the break of the triangle. GG today looked like it formed a triangle on the 5 min., breaking the triangle at $31.20 but not accompanied by volume surge. Was it worth taking the GG trade though is reached the target. I did not take the trade however. Just trying to learn spotting patterns.

A question about ORBO trades. How do you choose your candidates for these trades. Do you have some stocks in mind on which you keep an eye or you go through every stock in your watchlist.

I want to thank you for all your help on fib and exits. I have improved my exits and let my trades run until I see some real reason to exit before the target. Though the exits are not perfect but they are way much better now.

Susan

Jamie said...

Susan,

Volume should accompany the triangle breakout. But a tighter pattern, like the V trade yesterday is going to generate a faster trade than a big, wide triangle like GG today. I guess it is worth taking if you have nothing else on your radar at the time.

The ORBO trades are usually stocks from my focus list. If nothing works on the focus list, I sort the WL by % change and look at the outliers. Everything has to done quickly, otherwise the opportunity is lost.

Good, I'm happy to hear that your trading is better.

Enjoy the weekend!