Wednesday, February 25, 2009

Opening Range Breakout - Agrium Inc. (USA) (Public, NYSE:AGU)

Shortly after 9:00 EST, the TI pre-market scanner had a lot of activity in Agchem, with CF ripping higher and AGU lower. AGU for CF was in play - short the acquirer and long the acquiree. I place my fibs from the pivot low to the pivot high and the trade became obvious with NRIB at base of R-zone.

A second trade presented itself on the retracement. This time place fibs from ORH to morning pivot low and watch price in the R-zone.

CF didn't go anywhere near the offer price (I read $72 on Briefing, but maybe it was a typo).

Last night we said that after yesterday's gold drubbing, we might get a snap back. Okay, so that was too optimistic, but the ORB trade set up nicely as price tested the R-zone for support and rallied from there.

The snap back rally might happen tomorrow. As you can see from the daily chart of ABX, today's stick is an inverted hammer and could form the middle bar of a morning star reversal if tomorrow we rally up to the mid-point (or more) of yesterday's WRB. Many gold stocks printed similar patterns so not just ABX.

Last night we said FSLR was trading lower on earnings. I was watching it out of the corner of my eye, but must have been distracted, because I missed the actual BO. Rather than jump in, I waited for price to consolidate. Place fibs above BO base and wait for retracement. I was expecting a flag, but instead I got a shoulder, so I knew that I had to get out earlier than planned ( 15 min. chart looked like inverse C&H).

Nice extension (big head). I should have entered long as price broke above 50% extension level (NRIB), but I was waiting for inverse H&S to take shape. It got sloppy and didn't break successfully. Finally jumped in on a mini three point base.

Short into the close. Since the close is weak we may get further downside tomorrow. The prelim. target would be $100.00, but could, over next few sessions fill the Nov. gap.

6 comments:

john said...

Brillfreakiniant trading. Are you scratching more when you shorten-up to one minute? Why are you shortening your time frame? ...is it because spastic, pandering, politicians are causing the market to jerk around so much?

Jamie said...

John,

My eyes are now trained to spot the setups on the lower timeframes with the help of the Fibs. With AGU and ABX I had a pre-defined trading plan, so it's just a matter of correctly drawing the Fibs and trying not to anticipate. I still look at 5 and 15 min. timframes, but this allows me to get in more trades. I did scratch once on FSLR (the elusive H&S pattern).

Today reminded of Q4 '08 - making the same money twice as the markets reverse and give everything back in the last hour.

The tail end of Jan. and first couple of weeks of Feb. were harder to trade as the markets changed direction on every headline. Lots of patterns with only minor extensions. Last week and this week have been much better.

OONR7 said...

way to get on the party train early!! Nice trade.

Jamie said...

Thanks 00NR7,

This is really working well for me. I like banking a big winner early in the session, then I can take my time and peruse the usual suspects, looking for orderly setups.

Jim said...

Hey Jamie,

The link "TI pre-market scanner" in this post does not appear to work in my browser.

Jamie said...

Thanks Jim,

Should work now.