Aug 30, 2007

CTRN - Short

I had such a small watchlist today that I didn't think I would find anything. I spotted CTRN as it was consolidating and decided to take the trade. Here's the chart:

  • Placed fibs. from 1st bar low to 4th bar high
  • Price retraced and consolidated along the 50% fib. level
  • Entered short on a break of the 11am bar low as it broke out of the base and below the 61.8% level on increased volume
  • Just like SAFM from earlier this week, I was looking to see how price was going to act at the ORL
  • Exited on a break of the 12:05 bar high (harami after bullish bar)

5 comments:

Jonathan said...

I was referred to your blog after being an avid subscriber of Jamie's blog. I'm really enjoying your insight and I'll definitely keep coming back.

I see you've mentioned your watchlist a few times in recent posts. How do you come up with a list of stocks to watch and how many stocks usually comprise your list?

OONR7 said...

thanks jonathan... glad to have you for a visit. As for the watchlist, I guess I should dedicate a post to it... but for right now I found some comments I made to Jerry earlier this month:

Scan criteria from Prophet.com:

Gap up
•Exchanges: NYSE AMEX NASDAQ(NM,SC,OTC,BB)
•Last Price is at least 5
•Today's Open Price is at least -3% higher than the Previous High and the Low Price is at least 0.20% higher than the Previous Close
•Average Volume is at least 100,000 shares
•Virtual Volume is at least 15% greater than Average Volume
•Percent Change is more than 2%

Gap down
•Exchanges: NYSE AMEX NASDAQ(NM,SC,OTC,BB)
•Last Price is at least 5
•Today's Open Price is at least -3% lower than the Previous Low and the High Price is at least 0.20% lower than the Previous Close
•Average Volume is at least 100,000 shares
•Virtual Volume is at least 15% greater than Average Volume
•Percent Change is less than -2%

I also pull the top gainers and losers from IB. That's it... I get all my candidates from those 4 scans.

Now, once I have the candidates... here's what I do:

From my prophet scan, I only import stocks that have a virtual volume of 700,000 or more. Sometimes, if the list is really long, I'll up that to 1,000,000.
Once I have my list, I sort by volume and then start eliminating. If price increments on the :15 chart are not .10 or more... gone. Looking at the :15 opening range, if price has hit the fib. ext as I'm putting my list together... gone. Also, if a stock gaps up, then falls well below the OR... it's gone as I'm trading in the direction of the gap and for that stock to come back to the area where I like to buy usually means it's exhausted by then. And, if a stock has not gapped from the previous day's close (whether up or down) then I delete those stocks as well. I like to see even a little gap.

I haven't really counted, but I usually have a watchlist that contains around 30-40 stocks (much less nowadays). I then divide my list into 'stocks that are trading close to my entry area (38.2 and 61.8)' and all the rest. Then I flip through all my charts and add alerts wherever I can so I don't have to constantly look at all of them. Once a stock has hit the fib. ext.... I take it off the list as well. So, my list definitely gets shorter as the day wears on.
It's a whole 'process' and once you start doing it it becomes a routine. I'm actually pulling my IB scans early (around 9:35), loading them into QT, backfilling and deleting. I hope to have my watchlist done by 10am so I can get in on the early setups.
However, I do not trade until I'm finished with my watchlist 'routine'.
Hope this helps and sorry for the long-winded answer but there's no short way around getting to my watchlist.

Anonymous said...

anoher one that came back to the ORL and then continued lower - actually came back twice. nice trade.

QQQBall

greytrader said...

I have been playing with the paint bars on QT, way cool. The most useful I have found is to indicate NR7 candles with an arrow.

It is hard to believe this software is almost free !

Anonymous said...

Interestingly, I took this same trade on the same day with similar entry and exit points.

Jet