Saturday, June 30, 2007

Trade of the Day - Network Appliance, Inc. (Public, NASDAQ:NTAP)


Above is the daily chart of NTAP which has been on my watch list ever since it gapped down on huge volume on May 24th. The key take away here is the pivot support at the $29.00-$28.70 level. After holding support in the $30.40 area for most of the month, NTAP gapped down again on Thursday, carving out a NRB. On the 15 minute timeframe below, you can see that it established a base and break setup which was begging to be broken on Friday.

As mentioned in my pre-market post yesterday morning, NTAP was gapping lower. On the open it tried to recapture the the base and failed. I took an aggressive entry with a stop just above the Thursday's closing highs. NTAP took a nice, orderly swoon into the 38% Fibonacci extension of the previous day high to the ORL at which point, I took a partial and tightened my stop, hoping it would extend to my PP support target of $29.00 which matched up with the 75% extension. It was a long wait, but NTAP finally came within pennies of the target in the afternoon.


Initially, the MRVL chart did not inspire much confidence because of the doji OR with a long upper shadow. However, after much narrow range choppiness, it appeared as if MRVL could be a B&B candidate as it twice tagged $17.87 followed by a shallow pullback. I entered a Buy stop limit order which was filled on the break. I watched carefully to make sure it didn't cave at the ORH. It managed to close above it and then ascend to the 38% Fibonacci extension.

My target was the 62% extension ($18.45) because that matched the PP resistance on the daily chart to the penny. I took a partial and planned to stay in the trade for a normal retracement (38%) of the last leg up. The strategy worked perfectly and I closed the balance of the position as price approached the target.

The next chart shows the retracement on declining volume after tagging the 38% extension and the last chart is the daily.


hadman said...

very nice. thanks for the great explanation.

Bubs said...

Great trades as usual. Can you do me a favor and change the address on your blogroll to the new blog @ next time you update the blogroll? Thanks

bl said...

AMGN must be on you watchlist with the mult gaps in May. I'll be watching.

Jamie said...


Yes, AMGN is on the watchlist. Long-term PP is $52.00. If that is broken, we could see some fast selling. Currently flirting with late May PP at $55.15.

Jamie said...


Thanks, I will this week.