Post feed
Congratulations to "Anonymous" for winning today's contest. He/She receives the privilege to pick the topic that I discuss in this particular post. The response I received said "I would like to have a follow through of the trade you posted yesterday "anticipated the bounce." You entered most on Monday, could you go through and share with us whether you took profit or stopped on.. Thank you."
Sure I can! I tried to ask which trade the individual was referring to, but didn't get a response. So I figure I will discuss any action I took as of today. I closed two positions... BHI and MLM. Here is what I originally looked at, and what my rule was to close out.
Let's start with BHI. Below is a chart illustrating what I saw, which was a downtrending stock at resistance when I entered the trade. My rule was to exit if I got a close above resistance. Towards the end of the day I saw there was no hope to retrace below this trendline, so I exited the trade slightly after lunch today.
Sure I can! I tried to ask which trade the individual was referring to, but didn't get a response. So I figure I will discuss any action I took as of today. I closed two positions... BHI and MLM. Here is what I originally looked at, and what my rule was to close out.
Let's start with BHI. Below is a chart illustrating what I saw, which was a downtrending stock at resistance when I entered the trade. My rule was to exit if I got a close above resistance. Towards the end of the day I saw there was no hope to retrace below this trendline, so I exited the trade slightly after lunch today.
Next: MLM. I saw a sideways trend in this stock with consistent areas of support & resistance recently. I liked the risk/reward and took a trade at resistance with the same rule as the first trade. A close above resistance and I would take the loss, dust myself off, and lay another trade on the table elsewhere. I closed this trade right after lunch when I realized that hope was diminishing.
Well thanks for participating in the contest. I would love to use names to respond to...so anytime you leave a post (good or bad) leave your name so I know who to address in response. Talk to you later tonight.
Could you discuss the potential flag setup on DCI. I feel this one is special because earnings aren't until early december, and if i'm right about the flag, this could be a $5 move on a $37 stock. I'm no math major, but I believe that's nearly 14%.
And if you don't want to discuss it, that's fine too. Hopefully some of your loyal followers will be able to make some money on it!
By the way, to anyone who cares, I traded for the first time on Thinkorswim today and actually laughed out loud and how easy it is to use.
Posted by
Anonymous |
10/05/2006 03:23:00 PM
Jeff I had a few trades like that today thank god for stop orders, i had a few that would have burnt be if i would have stuck with them. Cut your losers short and let your winners fun HET really balanced me out this week! Did you see tha gap up on that now that was sweet.
Posted by
Anonymous |
10/05/2006 05:15:00 PM
Jeff, On a trade like MLM will you do a complete 180 if you had seen strong volume with the break out of the channel. IE close the current position and enter the opposite? it doesn't look like the volume was there with MLM, but that was what I did with JCP on Wed. The stock went down on Thursday, so we will see what happens on Friday.
Posted by
Anonymous |
10/05/2006 10:31:00 PM
Tom,
You sold out of JCP?! Did you follow the CTSH trade with the rest of us? It will be tough to succeed trading breakouts if you sell on the retracements. It's almost like a guarantee of a loss on a majority of trades you make since re-test happen a majority of the time.
Posted by
Option Addict |
10/06/2006 08:09:00 AM
Hi Jeff,
As I'm looking back on WCC, does it now look like a wedge? I'm never really sure how to ID a wedge, because it always looks like it has changed trend.
Thanks,
Debbie Davis
Posted by
Debbie Davis |
10/06/2006 08:16:00 AM
Debbie,
It still looks like a descending triangle to me...however if you saw it as a rising wedge, or descending triangle, technically the stock displayed neither! Both are bearish continuation patterns, and it looks like the downtrend reversed rather than continued. Oh well.
Posted by
Option Addict |
10/06/2006 08:49:00 AM
I thought it might look like a falling wedge looking at the long-term uptrend, but there was a downtrend in there before the pattern started forming anyway. Thanks Jeff.
Posted by
Debbie Davis |
10/06/2006 09:33:00 AM
Just remember that the rising wedge will be slightly higher highs and higher lows coming off a recent downtrend that form the wedge shape.
Happy Trading...
Posted by
Option Addict |
10/06/2006 09:39:00 AM
There's no doubt in my mind that WCC is forming a bull flag and when it confirms i'll be pouncing on it like the Bears did to the Seahawks last Sunday night.
$10 move???
Posted by
Anonymous |
10/06/2006 10:18:00 AM