Sep 26, 2007

GB - Short

As Eyal pointed, it was pretty choppy today. I actually tried some new things to get my watchlist smaller - yet still loaded with nice stocks. Yesterday was a bit of an eye-opener as it reminder me that I was getting away from what's most important in gap stocks... big volume. So, I'm re-shifting my focus to try to eliminate low volume plays and I hope this will allow me to reduce my list quicker and focus on the high-volume gappers. I don't feel like I've missed high-volume plays, I just feel like I get lulled into chart setups and almost forget about the 'pump' behind the price action. Anyway, I'm rambling... all behind the scenes stuff. So, I missed a great play off of Jamie's watchlist today in GME. I was watching, nah - staring, the second bar on the 15-min chart but ended up staying out of the trade. The 10:10 bar on the 10-min chart looked good and so did the 10:20 bar on the 5-min chart. I was able to catch a nice short off of GB. Here's the trade (15-min):

  • After a strong first bar on a big gap down, price moved down through the fib. levels in a nice, orderly fashion
  • As it approached the 61.8 level, I notced a NR7 down bar on the 8th bar, but there was no volume behind it
  • The 9th bar produced another NR7 with increased volume and I entered on a break of the candle's low
  • I flipped to the daily chart to see what the potential run could be and noticed a major pivot (support) area at 27.40 so I was a bit nervous price would bounce at this area
  • I exited during the 12:45 bar after 'feeling' like 27 was offering a lot of support
  • Not a huge gain, but a nice trade after an 0 for 5 day like yesterday


Jerry said...

My PP was 26.90 (mid March / Weekly).

I was going to enter exactly the same bar you did but gave up. I was going to play long at 12:45, but I felt it shouldn't have enough gas to go back up.
The perfect bar was 13:15 but I just thought I will fine a better R. But this finished the day around $1 from entry. :(

gurlate said...

when i daytrade, i always see my winnings and compare that to hourly wages that i will make - w/ much less intensive work- doing productive work..
if my winnings make that number very small, i am not a happy camper.
anywho, i am not a full time trader//

John S. said...

Hi 00NR7, could I ask why the NR7's are called that, even though you mentioned this one was on the 8th bar? Is the NR7 just a generic term for a narrow band candlestick? Glad to see you got back on track today. . I just shorted BIDU most of the day and did okay. Could I ask what type of order you place when you look for a break of a candlestick below its low? Do you put in a short-sell stop order if it goes below it? Just like a buystop order if it goes above a certain price.

JSDA was on fire today. . Might be a good trade tomorrow. I will be curious if 10 bucks hold tomorrow. . Could gap up at the open if she gets some momentum.

Thanks, John

gurlate said...

come on John:
it is not as if some deep theoretician came up with NR7 ( ha ha) term to represent a trader's delight..
some one caught a seven NRs in a row a few times and felt good calling it NR7..
it hardly has any significance that u seek.

John S. said...

Silly question I know on the NR7, was just buggin the shit out of me, lol. . : )

OONR7 said...

jerry: looks like the entry bar prior to mine is more your style (no volume)

gurlate: thanks for the random thought

john s: as gurlate said, NR7 is just the most narrow of the last 7 bars. There's also NR3 as well. You can really look at any NR bar in relation to the previous bar and interpret it the same. NRBs represent price contraction and could lead to a nice move.