May 18, 2009

Rise or Fall - Revealed

I was happy to bring back the Rise or Fall feature and forgot how useful it is for me. Thanks to all for the comments and insight... really good stuff. Probably the most interesting thing for me is how my thought process was very similar to those who commented. Hopefully it's a sign of maturity on my part. On to the reveal...

Stock: GENZ (5/15/09)
Timeframe: 10-min
Trade: Short
Result: Win (but most likely on half my shares)

Analysis: I didn't take GENZ because it actually wasn't on my watchlist. It didn't gap at least 1.5% but, with a little push from TraderAM's EXC trade, I hope to catch some of these smaller gap plays.
For me, the right decision to make - based on the info on the chart - is to go short. No brainer. And here's why:

-bar three was a doji which indicates indecision. This is bearish especially in a gap down stock right below the PDL. 
-entry bar (4th) closed weak below the 23.6% fib. retracement level from yesterday's high to the :30 ORL.
-entry bar also closed very weak below S1 and the 5ema also acted as strong resistance.
-entry bar was NR3, inside bar with a .21 risk from its high to low. The ORL was .33 away so 1R was achievable with a potential 5R reward if it ran to the fib. ext. That looks good to me.
-As King Jamie mentioned in the comments, price did find support at the $59 (ORL) level and bounced back up. Price then pulled back close to the entry area and, if I had taken the trade, I probably would've been out 1/2 my shares at BE (since price hit my 1R level).
-Price could not sufficiently penetrate above the 5ema and fell all the way down to the fib. level. 

While there is risk in entering above the ORL, this setup really is my 'bread and butter' play as of late. A couple of these every day and I can spend more time in the French Riviera :)

1 comment:

Anonymous said...

cote d'zure. OONR's playground.