Monday, 17 March 2008

Trades 17/Mar/2008

Watchlist:
ACH,ASH,BLOG,C,CS,CTX,FCSX,FMCN,GFIG,IBN,IP,LEH,MRO,MS,
RYL,SAY,SLM, SLT,STP,STT,TBSI,TKC,UBS

A good trader friend of mine once told me : "There will be some days when market is news driven due to some event, it will seem like the market is going one way only and it's easy to jump onboard and make lots of money. But be wary, however strong the temptation to just jump in, you must resist it. You must stick with your strategy and stay focussed and calm".

Today was one of those days it seemed to me. I spent the early part of the day, trimming down my watchlist (which was initally a lot of candiates), so that I could concentrate and stay focussed on the best looking charts. I didn't think too much about what the market was doing. Just concentrating on my watchlist and whittling down the stocks to watch to a manageable number.

BCS (gap down)

After gap down, the stock recovered and trended up before it hit the EMA and then reversed to trend down. The 10th candle is red and closes below the OR and also closes weak itself. This is our trigger for a short.

Entry: 31.71 Stop: 32.25
Fib Ext: 29.87
1R=31.17 2R=30.63 3R=30.09

We were triggered on our next candle, but then that recovered and closed strong above the OR. I thought about it for a brief moment, but then closed my position for a loss.

IBN (gap down)

The price recovered after the first 2 candles then after the recovery it started trending down with the ema. The 10th candle drops below the OR. Then we have a consolidation below the OR with narrowing candles. The 13th has a long wick which fails to get above the OR, and the ema is providing cover close by. This is our trigger for a short.

Entry: 34.92 Stop: 35.45
Fib Ext: 32.20
1R=34.39 2R=33.86 3R=33.33

The price moves in our favour, and we take partial profits after a $1 gain. The rest is closed 1R.

FMCN (gap down)

After gap down we have sideways movement for several candles before a breakout to the downside past the OR. Then we have sideways consolidation to the ema again. The 14th is a NR3 hanging man type candle which bounces off the ema. This is our trigger for short.

Entry: 34.98 Stop:35.98
Fib Ext: 34.14
1R=33.98 2R=32.98 3R=31.98

We take partial profits at 1R (a $1 gain). The stop on the rest is moved to 3R after we bounce at the $30 level, which is where we are stopped out later. A nice gainer overall even though we couldn't sell many shares due to the wide stop.

UBS (gap down)

Another simliar pattern here. A gap down, followed by a recovery then a trend back down again to test the OR. Once past the OR (on 12th), we test the OR from below on the 14th candle. This is also a NR3 and NR7 and it closes weak. You can't get much better than this IMO for a trigger.

Entry: 24.78 Stop: 25.10
Fib Ext: 22.76
1R= 24.46 2R=24.14 3R=23.82

The price falls big time and we hit our Fib Ext later for partial profits. I close the rest 5 candles from end (at 3R) as it closes above the ema, following the green hammer like reversal.

STP (gap down)

Another similiar chart here. We go short on the 12th candle which is weak and closes below the OR. The next candle however was strong and came back to stop us out for a loss.

Entry: 29.20 Stop: 29.70

MS (gap down)

After the gap down, we recover and then trend down again with the ema. The trend down is all red and weak candles. The 12th is red with longish wick which bounces down from the OR.
This is our trigger for a short.

Entry: 35.24 Stop: 35.73
Fib Ext: 32.93
1R=34.75 2R=34.26 3R=33.77

We take partial profits at $1 gain (which is around 2R) then rest is stopped out at breakeven.

Overall a very good day. And there were some other stocks which I missed entries on.

I know some traders who trade just partial gap fills in direction of the original gap. Today was just perfect for those sort of trades, as a lot of gappers which gapped down, rose after the open to partially fill the gap but then fell again heavily during middle part of the day. In effect they would have took their short entries much earlier than mine today.

1 comment:

bl said...

TraderX would call them bread and butter plays + fib retracement/reverse.