Tuesday, December 29, 2009

Handle - Cephalon, Inc. (Public, NASDAQ:CEPH)

CEPH gapped up, printed a wide, bullish OR, followed by a handle in the upper range. The handle leads to price expansion and a full measured move as measured using the Fibonacci tool from the ORL to the ORH.

REGN was found through the Trade-Ideas scanner using the momentum scan. Again, a small, tight handle with NR7, leads to a full measured move of the last leg up.


Jim said...

Hey Jamie,

Nice job of finding some momentum plays in this low-volume EOY environment.

Jamie said...

Thanks Jim,

CEPH had good follow up trades today. The pickings are slim in the EOY environment.

Luis Miguel said...

Jamie: one question regarding your trades on CEPH and REGN. In CEPH you set your target as a 100% extension of the OR, without taking into account the opening gap. In REGN you set your target (100% extension) taking into account the full last leg up: it seems to me these are slightly different criteria...could you give some more advice, please?...

Jamie said...

Luis Miguel,

For the CEPH trade I traded it as a cup & handle pattern, where the OR is the cup. I targeted a full measured move of the pattern.

I excluded the gap because I was being conservative. I didn't want to overestimate the target. My reasons were more psychological than technical.

The REGN trade had been in an extended period of contraction. The expansion in the first leg up was on accelerating volume and, therefore inspired more confidence.

Luis Miguel said...

Thank you very much for your comments! Very, very, very useful blog!