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Friday, January 13, 2006

Viewer Mail - ILMN

"X, I love the blog and thank you for sharing so freely. In early Jan, I saw you post about a swing trade in ILMN in the comments section of another blog (High Retruns?). I rarely see you post swing trades on your blog, and was hoping you would post this chart and what you saw. It really took off in the past few days. Thanks again. Tara"

Tara - thanks for the kind words. I have posted a few swing trades on my blog, but for the most part I focus on intraday trades. I did trade ILMN and closed it yesterday. Here is the chart and analysis:

1.) What did I see?
Looking back to 12/19/05, you see price falling to the 50% retracement of the July low to the November high. It makes a nice bounce, and re-tests that level at the end of December/beginning of January. Again, ILMN makes a nice bounce off the 50% retracement, and it rallies on 01/04/06 to close above the 34DMA. The bar on 01/05 is narrow range, an inside bar, and stays above/closes strong above the 34DMA.
2.) What is the entry?
A break of the 01/05 high.
3.) What is the exit?
The target was the Fibonacci extension of the July low to the November high. It was hit on Thursday of this week. Note how price actually went above it, and pulled back to close just below that level - leaving an upper tail/wick. And then today price pulled back...that Fibonacci stuff can be accurate!

Notes - I will post charts from Friday over the weekend. Check back later.

Also, don't forget that Monday is Martin Luther King Day.

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