Wednesday, November 15, 2006

Groundhog Day - (NYSE:CAL) and (NASDAQ:GROW)

CAL gapped up on the open due to merger mania in the airline industry. I waited for a low risk NRB before my entry. I moved my stop to breakeven once it started testing the early morning resistance (blue line). However, CAL traded in a very narrow range for an hour and then broke through for a nice orderly, afternoon rally.

GROW opened strong and carved out a WRB followed by a narrow sideways consolidation, similar to yesterday. I entered on a break of the OR high. I took my exit when I noticed the hanging man reversal pattern starting to develop.

I don't know how much higher these two can go, but both names had stronger volume today than yesterday. I'd like to see them both pull back on the open tomorrow and setup one last long entry.


Glenn said...

Next time you post a new winner for yourself I'm gonna swing trade it for a week ;) Nice work as usual!!

TJ said...

Hey Glenn,
I could tell that GROW was going to be big today just by the incoming traffic referrals on this blog from last night's post. Lots of people googling "GROW" means another big move.

esto said...

Great trading Jamie. I considered GROW at the same entry point but the spread at the time was $0.30 or so, which scared me off. Maybe it was just a data error.

Anonymous said...

Hi Jamie,
Nice trade on CAL & GROW! You've been rolling the $$$ on CAL lately :)

I have a question on CAL though. Noticed you entered the trade before it cleared the OR high, which I understand it to be a slightly higher risk trade. Any reason why you did so? Thanks

The WHY-Trader

TJ said...

Hey Esto,

You're right, GROW has a wide spread. That's the only thing I don't like about it and that's also why I like to take my exit at the first sign of trouble, because the slippage from that spread can really eat away the profit.

TJ said...

Good question WHY,

I wasn't too concerned about the OR high, but I knew that CAL would consolidate on a retest the early morning highs. Notice how the tops of the second, third, and fourth sticks form a resistance line. However, I figured I could make 50 cents from my entry to the retest. When I saw how narrow the consolidation was at the retest area, I decided to stay in the trade and go for double or nothing. Another factor I considered was volume, which was outpacing Monday's big move. I allow myself a more aggressive entry when volume is extremely strong.