Jul 27, 2007

CE - Short

I wasn't sure how my watchlist was gonna look today after yesterday's huge selloff. I did say to myself that I wasn't going to hold on to winners for very long and if I was 'in the money' I was going to take it off the table. CE was my only trade as I wanted to keep every cent of profit (but I did see some other nice setups). Also, I thought CE was a picture perfect setup and entry for me... I really should create a hall of fame (like Victoria's library - where is she anyway???) and include this in it. Here's the trade:

  • Placed fibs. from 1st bar high to low
  • Price retraced back up to the 61.8% and promptly came down (bearish indicator)
  • Entered on a break of the 10:20 bar low (perfect shooting star) which had increased volume and closed right below the 38% fib. level
  • Exited just above the fib. ext. during the 10:40 bar (5-min). This broke from my 'exit off the :15 chart' strategy because price dropped so quickly that when I looked at the :15 chart I saw the 5ema so far up and I was afraid price would make a huge upturn. That's exactly what it did and I would've made much less exiting off the :15 chart. Hey, if you can exit off the fib. ext. then it's ok to stray... IMO.

Be sure to check back tomorrow, I'll be posting another Rise or Fall.


Glenn said...

Nice one!

Jamie said...

I love it when a stock sets up a base at the round $ number. The break often goes into free fall. Nice work!

OONR7 said...

thanks Glenn.

Jamie: yeah, I was looking at the setup with an itchy finger. I set my entry about 3 cents below the round number looking to see if it would bounce up quickly. It sank pretty hard after that.

Jerry said...

Look pretty as you always have candlestick that work for you. :p

Please tell me, would you have traded CYMI and FDRY this morning?

OONR7 said...

jerry: On shorts, I look for entry candles with very little or no lower tail. I especially like it when it occurs after a down bar and right below an important fib. level.

As for the stocks you mentioned... FDRY was on my watchlist but I didn't see a good setup in the direction of the gap. However, it did offer a nice countergap trade opportunity on a break of the 11:20 candle low off the 10-min chart. I have purposefully stayed away from countergap trades during the summer and concentrated on higher probability trades instead. I hope to re-incorporate them in the fall.

CYMI was not on my final watchlist and I'm having problems bringing it up in Quotetracker. I suspect it might've hit the intraday fib. level early on (I remove those from my watchlist).

OONR7 said...

jerry: CYMI is coming up now and as I suspected, it hit the fib. ext before a good entry appeared so I must have removed it from my list.

Jerry said...

I see.

On quotetracker, sometimes there is a sell/buy order well below/above bid/ask which spike greatly.

Does this happened a lot in any stock?
Is this like a block trade?
Would this cost a stop price to be active?

OONR7 said...

jerry... not sure I know what you mean, but if you're talking about a spike in price (up or down) I have seen that, but not often. Not sure if that's a block order but, yes, if your stop price is within the spike it most likely will be executed. It's happened to me a couple of times and I hate it, but I usually don't suffer a full 1R loss as price typically fills much higher.