RIMM set up a bear trap reversal this afternoon after taking out its ORL. After an almost 2 pt. swoon, price reversed on high volume, returned to the morning pivot low and broke out. The 5 minute chart below is how I traded it. It might be better to wait for the retest on the entry, but I was a little too anxious. If price stalls in the PP zones marked by the blue lines, start to partial out. I took a partial as price approached the morning swing high and folded when my target was met. Notice how the middle PP holds as support after price tags the green line and consolidates.
These bear traps or head fakes usually occur after an extended slide at technically oversold levels.
RIMM set up a bear trap reversal this afternoon after taking out its ORL. After an almost 2 pt. swoon, price reversed on high volume, returned to the morning pivot low and broke out. The 5 minute chart below is how I traded it. It might be better to wait for the retest on the entry, but I was a little too anxious. If price stalls in the PP zones marked by the blue lines, start to partial out. I took a partial as price approached the morning swing high and folded when my target was met. Notice how the middle PP holds as support after price tags the green line and consolidates.
These bear traps or head fakes usually occur after an extended slide at technically oversold levels.
