Day Trades - TCK, CLF, TBL

Bear flags have been hit and miss in this market. Mostly they've been fake outs. So why was TCK a good short? From the daily chart above, we noted a huge volume spike on the Feb. 9th drubbing. So we see a huge red stick with volume, plus bear flag with NRIB observing the downsloping 5 ema as resistance closing at the base of support. This bear flag felt like it could work.

Small size on break of $58.00 and added at the first consolidation BO. Took a partial after 3 consecutive WRBs on 15 min. timeframe (not depicted). Got stopped on balance as price capitulated into $56.00 and bounced.

CLF gapped up on earnings. Price chopped around in the first hour and then started basing in an increasingly narrow range, forming a flat base at $99.50, and setting up a gap fade.

Price breaks down, retests the base and runs lower for 3 consecutive 15 minute bars. Take a partial as price approaches $98.00. CLF snapped back sharply. I thought the second half was going to get stopped out at BE, but, it came back down and I was able to salvage a decent profit on the second half.

Looking back at the 15 minute chart, there just wasn't enough volume expansion on the initial leg lower to expect continuation.

TBL was another earnings gap from the Trade-Ideas scanner - gap up min. $1.00, RSI on 15 minute timeframe minimum 60.

TBL gapped and ripped then spent most of the rest of the session in a tight narrow range. Normally, I like to buy the BO of the upper range, but time was of the essence, so I decided to buy the bounce off of the bottom of the range, then if the BO failed, I would have some profit from the trade. Turned out to be a good strategy as price/volume expanded into the close. The base BO also set up perfectly with a low risk NRB on the 15 min. timeframe.

Entry and exits depicted on 1 minute chart below.

Day Trades from Watchlist - SNDK EXPD

I highlighted the SNDK and EXPD setups in Sunday's post. For SNDK, both of the targeted levels were attained in very short order.

I didn't trade SNDK on Monday or Tuesday because of the large gap. Finally, yesterday I decided to enter on the break of the ORH, otherwise I was going to miss the entire move altogether. As depicted on the 5 minute chart below, SNDK gapped open and held the PDH as support. Enter long on break of ORH. Exit half when the $45.00 target is reached. SNDK consolidated briefly and ripped another half point. The long upper shadow as SNDK tags $45.60 and pulls back, signals the end of the move.

EXPD gapped and sprinted to daily baseline in the OR, signaling that it was finally ready to BO of the daily base. Enter long as price breaks $52.00. I was targeting $53.50 based on long term resistance, but is stalled about 10 cents shy and it was time to get out as the move was very extended.

Add BIDU to the WL. As you can see from the daily chart below, we have a base forming at $109.50. Yesterday's bar is NR7 (price/volume contraction ahead of expansion). Since testing support last week, we have carved out a higher low and BIDU is forming a mini ascending triangle base. Target is daily resistance at $115.00.

The 15 minute chart shows how clean the underlying base is.

Technical Picture - Follow Through and Base Break-Out

Yesterday stocks held resistance at their 200 SMA, but today's strong start led to a broad based rally with all major sectors participating, climbing past the key technicals to settle at a three week high. Euro strength was the primary catalyst.

FSLR gap and go, followed by a shallow retracement. Wait till it signals it wants to go higher. Partial 50% extension.

CELG bullish flag. Partial at 50% Fib. extension. Stopped out on balance.

INFY (gapper from yesterday) briefly took out ORH, then formed a handle to go long.

Technical Picture - Profit Taking at Resistance

Markets gapped up and rallied to the 200 SMA and full retracement of last week's slide. As soon as that widely watched tag occurred, price started to retreat as market participants booked profits. Selling was slow and choppy until Moody's downgraded Greece debt, resulting in an inverted hammer/ bearish shooting star daily candlestick pattern. Overnight, S&P futures retraced 62% of the PDR (previous day's range), currently trading in the ambush zone.

INFY from the Trade-Ideas scanner, gapped and rallied above the daily pivot R2 (blue dotted line). Price consolidated the gap in an orderly fashion. Enter long with target of weekly R2 which matches nicely with full Fib extension.

NTAP - Target 2nd half of full extension of Friday's pattern.

It was important to book full profits before the S&P tagged the 200 SMA because a sell-off was likely. I took half off my POT swing trade on the open. Still holding full NTAP swing trade in the hope that the market does not retest last week's lows.

Gapper - Teck Resources Limited (USA) (Public, NYSE:TCK)

Last night I mentioned in the comments of the previous post, that TCK was a focus list long. As you can see from the daily timeframe above, it had carved out a solid base. Yesterday's NRB was the perfect pause before expansion. This is a high volume BO and I'm holding for a swing in my retirement account. The day trade in my trading account is outlined below.

This morning TCK gapped up with bullish opening range. Price retraced to the 5 ema on declining volume. Enter on break of ORH. Take a partial after 3WRBs as price approaches whole $ level. Exit balance as price approaches full extension.

Mail Bag - Gap Scan

Hi J

I noticed on your newsletter you said ANF from the gapper scan, are you referring to the Trade Ideas Scanner? If so, can you tell me which scan parameters work best?

Again thanks for your help.

Hi E,

Yes, I'm referring to the Trade-Ideas scanner. Basically, I started off with the TI pre-configured scan entitled "Stocks down big in pre-market" and I adapted to my personal needs. In the window specific filters I set a min . price of $6.00; min. daily volume of 200,000 shares/day; with a max up from the close of -5%. In the symbol lists, I exclude all ETFs, Holders, Ishares and special symbols.

In summary, I'm looking for a wide gap from previous day close, like an earnings gap or story stock. The settings I'm using limit the number of hits to a manageable level, and eliminates all those ETFs. When trading gaps, you want to focus on the momentum plays, which mostly involve individual stocks. Measure quality by number of days and check the daily for a good idea of support/resistance levels. In the case of ANF, although the number of days was few, the daily chart was setting up for a bearish island reversal because the gap was wide.

Trading in Slow Motion

ANF from the gapper scan. Ambush on the first retracement and MA convergence on the second. It's very important that the second retracement be shallower than the first.

POT carved out a huge cup and handle, but the target was a gap fill. Normally, we expect a C&H pattern to deliver a 100% extension, but not if breaks out in slow motion with only a slight uptick in volume. I shorted the lower high after the gap fill, for a small move into the close.

Gap - MDVN, Gap Fade - ATHN, Ambush - SPY

MDVN, from the TI scanner, gapped up in late pre-market. The opening range leaves a long upper shadow, but clears daily resistance (blue line) on a closing basis. The next two bars are NRIBs in close proximity to rising 5 period EMA. This setup is very similar to the GIL trade earlier this week. Burn it to memory for future reference.

It's always a good idea to map out daily support/resistance of gapper candidates in pre-market and/or first 15-30 minutes of trading session. That's why I like the TI scanner - it tells me how many days of S/R are being taken out in pre-market price action.

ATHN, also from the TI scanner, had two support levels at $29 and $28. Buyers stepped in at $29. The opening range was solidly bullish and I waited for a break of ORH. It's important to watch carefully, for a close above the downsloping 5 period EMA just above the BO point.


SPY setup a perfect ambush trade. Took a partial as price approached the downsloping 50 SMA and exit balance on weakness following lower high. Price eventually retested sessions highs, but failed to close above, so I waited for confirmation and shorted the failure.

Gapper / Cup & Handle

The lower $USD was a good opportunity to focus on lagging commodities, steel and coal, or as some people are calling it, the reflation trade.

X gapped up, carved a couple of inside bars, and broke out of its base with a fast move to the 50% fib. extension.

ACI also ripped higher after gapping up, but I caught the secondary play, after it consolidated the first leg, or the C&H breakout. As you can see from the chart, it was a slow, but steady move.

SOHU gapped lower and carved out an inverse C&H. I especially liked the price/volume contraction at the base of the round $ number just before the BO. Ultimately, I was expecting a wider extension from such a perfect base, but it didn't even reach the 38% FE of the ORH to the base. I thought it might form a mini bear flag and continue but it didn't.


The finer details of entry and exits are highlighted on the 1 minute chart below. The straight blue lines are the initial base, followed by consolidation points on the way down. See how the blue lines come into play as price retraces and then begins to fall down again.

NKE was an earnings gap that looked way too choppy in the early going, but eventually, it carved out a C&H base. The second BO bar, was a shooting star and I moved my stop just pennies below the base and BE. Surprisingly, after such a whip saw start, it rallied up to the next $ level and the 38% FE for a fast trade to cap the day.

Chart Patterns - Potash Corp./Saskatchewan (USA) (Public, NYSE:POT)

POT formed a bearish rising wedge. Price breaks out of wedge on rising volume with 4 consecutive lower closes. It looks like a flag pole. Price consolidates on lower volume = flag. Short the flag for sweet ride.

The NQ trade EOD is my "Kill or Be Killed" setup. How does it work? The markets have been grinding higher all day, but I'm just not feeling bullish about it because volume never really ramped up. I see what appears to be a topping pattern, in this case a H&S top. I short early and set a stop 1 point above the high of the day. This one tested my patience because it retested the top of my head. I took a partial at the base of the pattern because I still had to wait for the right shoulder to form and the suspense was going to be too much. When the pattern finally completed, it was a nice rip lower.

MANT was my gapper trade from the scanner. A few decent sprints up but no extension.

Opening Range Breakout - Potash Corp./Saskatchewan (USA) (Public, NYSE:POT)

First order of business today was to lock in my swing profit on ABX. Today's market sell-off spared no sectors, so pointless trying to pick a bottom until a clear reversal pattern develops.

POT/AGU carved out bearish h patterns.

STT from the Trade-Ideas pre-market gapper scan faked an upside move, but quickly failed, setting up a low risk short. Took a partial as price retraced to the ORL. Eventually, STT carved out an inverse C&H, but failed to extend much beyond 50% on the first swing lower.

Update on ABX Swing

This is the TSX chart of ABX where I placed yesterday's swing trade. The Canadian chart is slightly more symmetrical than the US chart. Price gapped into resistance and the whole $ level so I exit the swing for almost 3 point gain. Price retraced back to the $38.00 base and I entered long again. The R-zone acted as resistance and I didn't want to have a losing trade going into the weekend, so I exit. Price retested yesterday's lows and reversed, so I swing again.

From the daily chart below, we can ascertain that $38.00 is a solid support area - several pivots and 200 SMA. However, it could fail and price could go to $35.00. Hopefully that won't happen. I'm targeting $45.00.

Inverted h Pattern -Hansen Natural Corporation (Public, NASDAQ:HANS)

HANS was an earnings gap from the pre-market scanner. Price gapped slightly and made a fast move higher. Place fibs from the ORL to the early pivot high. Price found support in the R-zone and I entered long. Exit as price approaches whole $ level just below 100% fib. extension. Price doesn't always reach the full extension and it's better to exit into strength. This is an inverted h-pattern.

Gap & Go - Research In Motion Limited (USA) (Public, NASDAQ:RIMM)

RIMM gapped down on lowered guidance. Price tested the round $ number $50.00 and tried to save itself, but sellers prevailed. It's hard to know exactly when to get in because the gap is so wide and the pivots are so far above price. Look for narrow range price action to develop with reasonable stop. Here I'm placing my Fibs from yesterday's close to the ORL. The OR is too narrow and the gap too wide, so I think this gives a reasonable target. But I took a partial at $48.00 to lock some in. Eventually, the 50% fib. extension was reached.

NVDA was much easier because we can key off of S2. Cover as price approaches the whole $ level.

Missed the gold stocks rally off the open - Fast moves to R2 - AEM and GG, and ABX didn't do to badly either.

HES - 2 IBs - partial at whole dollar level. There's a base at the blue line which may or may not hold as support. Morning star reversal pattern - cover balance and long.

Dummy Trades

Biotechs were the best performers on my radar today. AMGN retested the base but the 20 EMA was close enough to provide support and get things back on track. BIIB was a nice momentum move as you can see from the accelerating volume.


COCO was gapper on an earnings beat with improved guidance. OR breaks out of the daily base on big volume. Since the OR is wide, place fibs. from ORL to ORH as per Trader-X guidelines. I had a buy stop order ($20.52) in place after bar 5 but it took a long time to trigger. Well worth the wait. Partial after 1 pt.

DIS is an after hours trade on an earnings miss. Inverse C&H on 1 minute timeframe. Target achieved like a hot knife through butter.

Earnings Gap - Apple Inc. (Public, NASDAQ:AAPL); Potash Corp./Saskatchewan (USA) (Public, NYSE:POT)

AAPL and POT were the 2 earnings gaps that I was focused on this morning. Both had huge earnings beats and both guided lower. POT gapped lower and squeezed vertically making it hard to get it. Luckily it paused and briefly consolidated just above the $70.00 level, . My preliminary target was $74.00 pivot point level. I was going to swing the second half but decided to bail EOD because the trading day was so all over the place, I'm not sure what to expect going into tomorrow.

AAPL gapped wide despite the negative opening market sentiment. I place my fibs from the ORH to the early pivot low and entered long as price paused at the cusp of the R-zone. Price retests and holds support of the ORH on a closing basis and easily reaches the next fib. level.

Price retraced and found support at the base of the R-zone. The second test of this level gave me confidence to enter a second time.

Keeping both of these names on the focus list for tomorrow along with a couple of other Canadian names mentioned in the HCPG newsletter tonight.

MS has retraced 62% of the January slide in just two days. The trendline is steep and momentum declining on today's thrust, but a good name, along with other broker dealers (GS and JPM) to keep on the WL near-term. Some good charts here.