Wednesday, September 24, 2008

Gapper Dummy Trades - Sequenom, Inc. (Public, NASDAQ:SQNM)

The first chart is the daily time frame for SQNM which was ripping on the pre-market scanner. Price was challenging $25.00 and clearly breaking out of a nice base. I was excited because we haven't had many tradable BOs on the long side in recent history. A quick look at the weekly chart established a clear path from $25.00 - $30.00.


The 15 min. chart shows that volume is huge, a prerequisite to a successful extension. Price consolidated in a NR at the base of the ORH. Entry precision on the 1 minute time frame below.


FFIV didn't work out as planned - didn't get anywhere near the Fib. extension. However, it's a widely held name with good volume which generally allows for orderly trade. Scalping in and out turned in a good profit by EOD. Every time a base forms on the lower time frame, a reversal or retracement is possible and a decision by the trader is required. NR consolidation with no volume usually means consolidation, followed by continuation, but a rounded base often leads to a sharp retracement. V bottoms lead to reversals.

Short/cover/short again after head fake/cover/short after full retrace - notice the tiny inverted C&H at the trend line break/cover as price swoons back down to previous base.

5 comments:

Day Tradr said...

Excellent trades as usual Jamie. What were your reasons for entering long at 12.30 in FFIV? What was your initial target on that trade?

Would you have gone long at around 14:40 in PPC today?

Love to see how you can make money everyday in any type of market.

Jamie said...

Hey day tradr,

The FFIV chart is a little confusing with all those arrows. All my positions were short. The blue arrows are spots where I covered my shorts.

PPC is trading like it's bankrupt. Today's action took out all time lows so I wouldn't try to be a hero on this particular name. However, if one of my WL stocks capitulates intraday, I have no problem trading both sides.

theresa said...

Very nice scalping on FFIV. Why did you draw the 3 horizontal lines where you did? ...they don't seem to correspond to any prior pivots.

Day Tradr said...

My apologies Jamie. I thought you went long there.

Jamie said...

Thanks Theresa,

Good observation, the lines represent my initial entry/exit points ie. BO and reversals. Price has a memory, so I look for potential setups when price comes back to those lines intraday. If I see a tight consolidation at the base of one of those lines, I get ready to pull the trigger.

My DRYS trade today is a good example. I will post the chart tonight.