BTU - 121205

Mary sent the following email:

"I know you have said that the majority of your trades happen in the morning because they are more reliable, but you have said that you occasionally (sic) take trades in the afternoon. Can you highlight a few afternoon trades next week? Thank you!"

I have received several email requests similar to Mary's. I have said in the past that my ratio of morning to afternoon trades is easily 3 to 1, and probably more. But I usually watch the charts until the close and will trade set-ups in the afternoon several times a week. Today BTU set-up nicely at 2:00.

1.) What did I see?
A gap up and wide range first three bars. Price bounced off the retracement zone of the previous day's low to the opening range (OR) high (as well as the 34MA), and started a nice move up on the fourth bar, continuing into the afternoon. The tenth bar gave several bullish signs - it was narrow range, it was "hammer-like", and it closed above the OR high set in the first 15-minutes (the first time price had closed above this level today).
2.) What is the entry?
A break of the tenth bar high.
3.) What is the exit?
The target was the Fibonacci extension of the previous day's low to the opening range high. It was hit on the next bar.