Thursday, November 11, 2010


Two momo trades from HCPG.

BIDU opened in the retracement zone (RZ) of the previous range. Took it long as price move out of the RZ. Once it broke above the PDH, it was a vertical up to the 62% extension. It stalled at $115.00 and eventually was stopped on balance.

OXY was not as obvious, but I went long before it broke out of its Bollinger Band. Slow at first, but made up for it in the afternoon. Partial at 62% FE and exit balance at full measured move.

AKAM was an ambush setup. Took a partial when price stalled at lower blue line (low of earnings gap down day). Exit balance at yesterday's support zone - now resistance.

RIMM was a B&B long - easy.


Ilunga said...

Can you talk more about your stop if the setup fails?
For example, what would be your stop strategy for the rimm in this post if it broke the base out and fell back.

Jamie said...


Normally, I use the previous low as my stop. So in the case of RIMM $58.00 is the initial stop. Once it starts to run, I want to use the 20 EMA as support.

For example, I also traded BIIB and SOHU prior to the RIMM trigger. Both started to work and stalled. The market isn't trending today, so I don't need to tolerate unnecessary losses to eat away at my P&L, so I raised the stops to 20 EMA to minimize losses and scratch the trades. Same strategy applies to RIMM.

DW said...
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DW said...

Hi Jamie,

Great post, thanks.

I put the Fib from ORL to previous day close, and found AKAM form a Base at R-Zone $50. The Base looked nice on 5min frame with lower highs. I short on break of $50 at 11:00 and stop at $50.43 when it break previous high.

Could you please give me some suggestion about this trade? Did I short by a bad setup? When should I move the stop? (I wanted to wait a lower high to reset the stop, but it reversed and broke the previous high directly.) Why you ambush trade it in long side even without a Base and EMA just above? Many Thanks.


M said...


Do you look for a close below the 20 EMA to exit or just a penetration below the 20 EMA?

I traded CNQ today - 7/15. Exited 12/15 when low of 11th bar was taken out. If we overlook the resistance on the daily at $40, should I have given it more wiggle room in these kind of setups?


DW said...

Hi Jamie,

Do you use 20EMA in 15min frame as a stop? It is often far away from price.


chin said...

Hi Jamie,

Good morning. ES looks bad, looks like we may breach the 20EMA on S&P today(1203) which held as a strong support for the last couple of days. How bad does it look today ?

Your thoughts would help as always.


Jamie said...


I chose to ambush AKAM on the long side because the first impulse move had wide green bars with high volume. The retracement had smaller red bars on lower volume. The smaller red bars on the retracement imply a pullback not a reversal.

Study price/volume action to help you determine direction.

Based on your Fib. placement, I would suggest that your entry should be when price moves out of 50% level, so your entry was a little too late.

Jamie said...


On the 15 minute I look for the 5 EMA to hold as support. If price closes below 5 ema and doesn't immediately pop back above, it's best to exit the trade.

By the same token, you want to enter very close to 5 EMA and not chase.

I think you did okay with the CNQ trade. The shakeout bar that stopped you out was quite wide and looked very bearish.

20 ema can be used on 5 minute chart and allows for some wiggle room.

Jamie said...

DW 20 ema for 5 minute timeframe and 5 ema for 15 minute timeframe.

joshua said...

dw,i agree with you. i would have been looking to short that as well.

jaime, thanks for the explanation of why you saw it as a long.