Monday, October 23, 2006

Dummy Trade of the Day - NVE Corporation (Public, NASDAQ:NVEC)

As usual, I ran my gapper scan shortly after 10:00 EST and I was pleasantly surprised to see two very familiar names show up - AKAM and NVEC. After a quick look at the daily timeframes, it was obvious that NVEC was breaking out whereas AKAM was running into resistance from the 20 day EMA. I waited for a low risk entry and exited after NVEC carved out a lower high in the afternoon. The NASDAQ market felt very weak early in the afternoon and I didn't want to push my luck. The chart does not look like much, but I managed to take out $1.30 on the trade.

One thing I should have done was calculate the Fibonacci extension on NVEC. I usually use a combination of resistance and the Fibonacci extension to calculate my target but I was lazy today. The 50% Fibonacci extension would have given me $42.60 as a target. My exit was $42.35. Discipline.

My only other trade was another long on CAL as it consolidated its gap. My entry was a low risk dummy entry on the fourth 15 minute stick. I exited this position before lunch with a small profit because I didn't want to risk a scratch and the stock felt sluggish after last week's big run.

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