Friday, October 20, 2006

Dummy Trade of the Day - Continental Airlines, Inc. (Public, NYSE:CAL)

I found CAL through a gapper scan and was planning to buy it if it reversed off of its rising 10 period EMA but I was away from my desk at the time so I waited to see if the next bar would close above support and then I went long. I didn't want to push my luck on options expiration so I booked my profit after a 1 pt. gain. A quick look at the monthly chart below shows that CAL rallied right up to resistance dating back to 2002.


ANPI was a left over from yesterday's gapper scan. I didn't trade it yesterday, but today I tried a low risk entry just above a pivot point, but it failed. Small loss.




9 comments:

Andrew said...

Jamie,

I keep hearing you refer to pivot point and I know what pivot point is and how the R1/R2/PP/S1/S2 is derived. You sometimes refer to it on your graph as being only one line, are you using it in a different context referring to the recent high or low? Thanks again.

Jamie said...

Hi Andrew,

I sometimes use the term pivot point to denote a price point where a stock repeatedly pivots and changes direction. I also use the traditional pivot point analysis that you mention but only on highly liquid trending stocks. For a better idea on how I use pivot points do a search on my blog for "pivot point analysis" posted on Sunday August 6th. There is an example with NVDA where I explain the visual aspect of pivots and direction change.

You can search this blog either through Blogger - top left hand side of the nav bar, or through Technorati - bottom center.

Simply Options Trader said...

CAL closed @ 35.05, I wonder if that's the pinning effect on options expiration...

Anonymous said...

Hi Jamie,
When you refer to 'Gappers' where are you getting this information?
I am using the Stock Charts 'Gap Ups' area. Is this your source as well. I remember you mentioning this awhile back. Am I correct or do you use more than one source?
Great trading,
Thomas

Jamie said...

Hey Simply Options Trader,

I wish I had time to incorporate options trading, and especially strike prices into my trading strategy. Yesterday, I was observing AAPL and it traded in a very tight range (hugging $79.50) for most of the session. Then at 3:00 it managed to break and rally up to $80.00. I'm sure the strike price was in play.

Jamie said...

Hey Thomas,

Nice to hear from you again!

The Gappers come from various sources including:

1.pre-market top trade counts from my IB (Interactive Brokers) platform;
2.Esignal;
3.Briefing.com gapping up and gapping down lists found in the Live -In play section or posted daily over at Trader Mike's blog.
4.Quote.com
5.Trade-Ideas gapper scans
6.Stockcharts.com Realtime Extra.

As you know, I am working now so it is difficult for me to monitor all of these sources for gappers on a daily basis. So recently I have come to rely on Stockcharts.com for my gappers because I cannot download any of my other software at work. Stockcharts is easy because once you create an account you can access it anywhere through the web.

I don't use their pre-programmed scans because they result in far too many hits, most of which are penny stocks. I go to the Create your own scan section and put in some filters for price and volume. And I also look for stocks to be trading above or below yesterday's close (gap up) or yesterday's low (gap down).

The real time version of stockcharts allows me to run intraday scans.

The Extra version of Stockcharts allows me to download my scan results into a folder for easy viewing.

Stockcharts.com is by no means the best scanning tool, however, for the reasons outlined above, it is usful for me and it has resulted in some very good trades for me this month.

On average, the scan I run gives me about 20-30 stocks for gap ups. The list is usually longer for gap downs and I'm working on tweaking my scan to narrow the size of the lists.

Hope this is helpful.

Jamie said...

P.S.

Stockcharts gapper scans only work after 10:00 EST.

Also, sometimes I have to run the scans twice before I find suitable candidates. Yesterday when I ran my gapper scan at 10:02 all of the hits were NG (no good). I ran the scan again at 10:30 and that's when I found CAL.

Simply Options Trader said...

Hi Jamie,
I think for stocks trading pretty close to a strike price with high open interest in that strike will tend to pin there.

My current gapper source is from IB & Briefing.com. Am looking for other sources as well. Do you mind sharing with us the filters you use for Stockcharts.com?

Many thanks & have a good weekend!

Jamie said...

Thanks Simply Options Trader,

No problem sharing but I think I will elaborate this topic in a post as I seem to be getting a lot interest on the subject.

Stay Tuned.