Thursday, July 20, 2006

Trade of the Day - Travelzoo Inc. NASDAQ: (TZOO)

TZOO's earnings were a real disappointment as noted here this morning. The pre-market trade was too choppy so I waited to see how it opened and decided to short on a gap fill. My target was yesterday's low and I covered my intial short for a gain of 2.4 pts. When I came back from lunch, I noticed it couldn't get a bounce and was hovering just above support. It reminded me of YHOO yesterday so I got ready to short again on a breach of support. I covered half of my second short as soon as price fell into the next support level and covered the balance into the close. I never imagined that a stock could shed 6 points on a two cent beat, but I guess the party's over and everyone wanted out.


Anonymous said...

Nice trading, Jamie.

In this case, what would your stop have been - yesterday's high?

Appreciate all your help.


Chris M

TJ said...

Thanks Chris,

Yes, my stop was set 10 cents above yesterday's high. Notice how volume dried up at lunch time and then on a huge volume spike, the stock fell through support. This is one of my favorite setups. The risk reward ratio on low volatility breakouts is usually pretty good.

Jorge said...

Check out the next TZoo. Publicly traded OTCBB IVGA at .001 I've bought millions of shares for $1,000 per million. Looking for IVGA 10Q shortly. Goal is .02 by year end. Recommend buy and hold.