Wednesday, July 30, 2008

Gapper Dummy Trades - Garmin Ltd. (Public, NASDAQ:GRMN) ; Buffalo Wild Wings (Public, NASDAQ:BWLD)

Once in awhile, a stock gaps, breaks daily support on the open, and runs all day. GRMN was the prefect candidate on another earnings disappointment. Trader-X style. I'm almost certain X was in this trade today!

BWLD initially looked like it might form a bullish C&H, but all of sudden it drooped over and set up the perfect inverse C&H pattern at the whole $ dollar base. Thought it might fill the gap, so I held past the measured move, but then I decided to fold. This stock has such a wide spread at times, so if you don't exit when you want, you'll end up giving back too much in slippage.


OONR7 said...

glad we all got a taste of GRMN. Do you look at relative volume at all when glancing at your watchlist every morning or do you strictly look at actual volume?

Jamie said...

Hey OONR7,

Most of my candidates, gappers and otherwise, are selected on % change. I'm assuming that volume comes with price. I use Trade-Ideas pre-market scans to select the gap candidates based on % change from previous day close. I'm looking for stocks that are ripping in pre-market. Not all stocks have a lot of volume in PM, but if the stock is down 5% from PDC, there's probably a good reason and volume will follow when the session opens.

I use actual volume as my meter but I use wide range views so I can see several days volume on my 15 min. intraday chart.

GRMN is a WL stock for me so I was ready for it. I also have several candidates picked out for tomorrow morning based on post market action. AKAM, FSLR, TTEK to name a few.

Trader-X said...

Oddly enough, I missed the entry on GRMN. I was in a few other positions, and it slipped by. I watched it fall all day and was kicking myself!

I was in BWLD, and agree on the wide spread. In general, I have been noticing wider spreads on many stocks.

Jamie said...

Hey X,

Know the feeling. Missed SAP a few days back. Agree that wider spreads on mid-range stocks seems to be a trend.