Monday, July 28, 2008

Gapper Dummy Trade - Ryanair Holdings plc (ADR) (Public, NASDAQ:RYAAY)

RYAAY (Irish airline ADR) gapped down on earnings. Initially it looked like it wanted to form a bullish base at $28.00, but eventually it succumbed to the bears and formed a bearish flag. My target was $25.00 based on the daily time frame, but when it printed a huge capitulation volume spike as price approached $26.00, I decided to cover. Lunch time was just around the corner and I didn't feel risking a stop out during the lunch time doldrums.

5 comments:

QQQBall said...

light blue MA help you stay in that trade throught the little bear flag (mid-trade or so)?

Jamie said...

QQQ,

Many factors to consider but I primarily watch the 20 ema on 1 minute chart to monitor potential reversal. If price closes above 20 ema and doesn't immediately come back down,it could retrace to the 50 SMA. 38% Fib retracement is normal and should not reverse a strong trend.

Anonymous said...

Hey Jamie,

The second 30m bar in RYAAY was an IB. A tight 30m IB often corresponds with a flag or basing pattern.

BRCM had a nice tight 30m IB in the early afternoon. Going to the 5m shows the corresponding base. The downside BO would probably have given a better move if not trading inside the previous day's range.

Jamie said...

Hey Jim,

RYAAY 30 min. - what MA are you using? Nice job on BRCM!

MICC a gapper I traded last week, was my best trade of the day. This stock has been tradable every day since the gap and I've been missing all the moves, so today I was aggressive and shorted it on break of 15 min. OR. I sold after price paused just below daily support and missed the last leg down, but still a very good trade.

Anonymous said...

Jamie,

Yes, I see that MICC has presented some good trades of late. Good job! The pause (yesterday) just before last leg down was consol at a larger 3 PP base (73.85) - hindsight of course.

On the 30m charts, I use the same MAs: 5ema, 20ema and 50sma. The 30m IB in RYAAY was too far from the 5ema in terms of "trading from the 30m chart". However, any 30m IB in an active stock is worth a closer look on a lower time frame. Often the 30m IB represents the tightening prior to the BO of a C&H, B&B, flag, etc. If there is a good pattern on the lower timeframe, then I ignore the 30m MAs and trade with the lower risk on the lower timeframe - same as with patterns from 15m.