Thursday, March 05, 2009

Stair Step - The Gymboree Corporation (Public, NASDAQ:GYMB)

Stair step patterns offer low risk entry points. I missed the first step up, but managed to get the second long and then the short after price stalled out at $17.00. I'm keeping this one on the WL for tomorrow, because sometimes the stairs carryover to the next session and they can run all day.

IDCC was a gapper trade for me two days ago. Gravestone doji trigger bar just below downsloping 5 period EMA - took a partial after 3 consecutive red bars. My target was the 50% FE (Fibonacci extension) but IDCC didn't want to go there, at least not today.

POT made a lame attempt to retrace, but the candlesticks were screaming "short me". Trigger bar is NR7 - spinner with upper shadow. Partial after 3 WRBs and exit as price approaches $68.00 just below 50 % FE. It's not obvious on this timeframe, but 1 minute shows clear signs of capitulation volume as price approaches FE.

V ended yesterday's session with a bearish topping candlestick pattern. I placed my fibs from PDH to ORL. I was expecting it to carve out a few inside bars and roll over, but V rallied back up to the top of the R-zone. Finally, it came back in and printed NRIB and I went short. After testing ORL, it retested my BO point, and eventually succumbed.


jordan said...

For the POT trade, it gapped and open below PDL, so why not place fib from ORL to PDH? You exited at 50% ext, why not 38.2%? Appreciate your insights. Thanks

TJ said...


For wide gaps that open well beyond the recent trading range, I would place fibs as you describe. For POT, the gap is not wide and the highs of the OR overlap with yesterday's lows, so I prefer to place fibs either:

1. PDH to PDL, or
2. Most recent pivot high to ORL or early pivot low. So, in the case of POT from third last bar high from yesterday to ORL of today. Then we see price retrace exactly 50% and print a shooting star, so shortable on break of third bar low.

This is different from what I was doing in the past, but seems to work better for me.

On wide gaps price often stalls at 38% extension, but on smaller gaps, I'm letting them run either to 50% or whole/half $ level. Also watch for intraday pivots S2/R2.