Monday, February 23, 2009

Opening Range Breakout - Agnico-Eagle Mines Limited (USA) (Public, NYSE:AEM)

Both AEM and NEM are the same type of setup. I'm placing my fib lines from the PDH to the ORL or early pivot low and looking for potential retracement trades (back to Friday's highs). AEM worked perfectly and NEM started out as planned, but couldn't follow through on the second half, so I had to short it on a lower high in the R-zone.

If you're like me, trading from a WL, focusing on certain sectors, you probably look at what's going on with yesterday's winners for follow-up trades. If not, this post won't be of much interest. Trying to find the best Fib. placement for these types of trades that gap within the previous day's range is challenging. I really like how this Fib. strategy worked for me, because both charts were easy to read. For AEM the R-zone acted as support, whereas for NEM, it acted as resistance. In both cases it was clear what action was required to make money.


9 comments:

Tyler said...

Jamie,

Thanks for the charts. I was watching AEM today, but wasn't sure how to trade it. Looks like you had a great day!

Thanks,
Tyler

PDT said...

Nice trades.

Aren't you concerned that your entries are close to the 38% retracement? Don't they usually act as resistance?

Thanks

Trader 504 said...

Jamie,
Just recently came across your blog. It's informative and helpful. Nice trade on AEM today.
Where is your stop and also what moving averages are you using?
Thanks,

Golden Bear said...

Hi Jamie,

On the AEM trade, where did you set your stop since the 10th bar that broke out is quite wide? You are amazing at getting back into a trade as well as flipping over to take the opposite trade.

Best,

Golden Bear

Jamie said...

Thanks guys,

The idea behind these ORB trades is instant gratification. Allow for a retest of BO point, but exit on failure or retracement of the trigger/entry bar.

I'm not concerned about resistance at the 38% retracement level because of the way I've placed my fibs. Before I was placing fibs. from PDL to PDH, in which case I was already above 38% level on my entries.

MAs are 5ema-pink, 20 ema - blue and 50 sma green. Outlined briefly how I use the MAs last week in the Feb. 17th post.

yr said...

Jamie,
If I remember correctly your rules for Fib placement, if the OR is within prev day range, you place the fib from PDL to PDH. AEM was in prev day range, any reason why you didn't place it this way? Is your stop the green hammer low? Thanks

Jamie said...

YR,

I'm experimenting with different fib. placement - reaction high to reaction low.

Joao Henrique said...

Jamie, great...nice reading. No matter how but you always get your slice... even eventually testing new rules ;)

NEM was showing relative weakness to AEM. While AEM made a new high, testing PDH, NEM couldn´t make a HH.

If you draw the fibs from PDH, PDL as usual, you will see that AEM broke 618 line and retraced back to test R-zone as support, while NEM R-zone held well as resistance.

If you went short at the open, below the 5min low, you would be going short right at support. The stocks rebounded strongly from there.

Jamie said...

Thanks Joao - Good analysis!