Wednesday, March 17, 2010

Technical Picture - Overbought

Tonight's HCPG newsletter points out that today's action leaves the SPY with 14 days of consecutive higher closes. The SPX chart above shows that price barely paused at resistance before breaking through. Volume on the BO is average, so there was no short squeeze in play. Are investors too complacent? Since we didn't pause at the base, we should expect a retest.



The RIMM swing trade is in peril. Price closed below 6DMA and the rounded top looks very bearish.



Daytrade - GMCR formed a bullish flag pattern, but didn't reach full extension.

10 comments:

Day Tradr said...

I came here to ask about RIMM swing trade and see that you already mentioned it :). Did you close your swing position? When do you close the trade after the close below 6 EMA - on the next day or the same day? I took a small position in RIMM on the BO but exited today.

Jamie said...

Day Tradr,

No, I close the position next day. I'll be watching it in pre-market. I think it's going down to $73.00. If that level holds, and prints a reversal pattern, I'll get back in.

Sally said...

Jamie,

What time frames do you use to time your entry/exit points on RIMM, GMCR please?

Sally said...

Jaimie,

Is there a book which explains the acronyms of chart patterns, that you use to explain and show NRB's OR's, etc., as well as the different time frames best suited to make decisions. I've been reading your analysis and I like the clarity you give them
and have found very useful and I want to put all this technnical information into a sequential form --any suggestions will be most welcome. Sally

nickname said...

Looks like SPX might be starting a fourth wave pullback. Also, It is now trading at the top end of the 50,2 Bollinger Band. Barring something unforseen,this should be a modest pullback and then trade to a new high for the year with the potential target of SPX 62% retracement from the bull market high and March 09 low at about 1229.

Day Tradr said...

Thanks Jamie. Would like to see where you exited in RIMM today.

Jamie said...

Sally,

I use multiple timeframes. The RIMM trade was planned on the daily, but the entry was on the lower timeframe 5 or 15 minute.

GMCR was entered on the 15 minute timeframe after I spotted it on the Trade-Ideas momentum scan and waited for price to consolidate the initial sprint.

The RIMM exit ie. swing trade exit is based on the Fibonacci target or breach of the 6 period EMA on a closing basis, which ever comes first (See my March 11 post on swing trade rules). Unfortunately, the breach of EMA stopped out the trade.

The GMCR exits - take half off at 50% FE or after 3 WRBs. Usually try to hold the other half to full FE, but GMCR printed bearish shooting star, so exit 2nd half.

Jamie said...

Sally,

I don't know of any books that use the same terminology and same setups as this blog.

I'm not sure if you are daytrading or swing trading or both, but either way, you might consider using dual timeframes. The higher timeframe to plan and the lower timeframe to execute. For daytrading, I prefer to execute from the 15 minute timeframe.

When I first started trading I worked with one setup exclusively. I developed and adapted the rest through observation and from reading other blogs.

Under key posts in the side panel you will find a post of abbreviations and acronyms which might clarify things. Also, some posts on key setups. The labels section of the side panel gives you lists of posts on various tags.

Hope this is helpful.

Jamie said...

Nickname,

Agreed.

Jamie said...

Day Tradr,

See my last post. I was sorry to have to let it go. I was hoping it would pop ahead of earnings next week.