1.) What did I see?
A gap down and wide-range first bar that leaves a very long upper-tail. The second bar narrows in range and stays in the lower 1/2 of the first bar's range. The third bar attempts to rally, but leaves a long upper-tail and closes weak.
2.) What is the entry?
A break of the third bar low*.
3.) What is the exit?
The target was the Fibonacci extension of the previous day's high to the opening range low; it was hit just before 1:30.
Set-up grade = B (the original set-up was above the OR low)
Note - there was a second entry on a break of the sixth bar low as it failed at resistance from the OR low.
*as with any entry below/above a previous high/low (in the case of my charts, the opening range (OR) high/low), you need to watch for resistance/support as price approaches those levels. If it stalls, you want to exit. If it breaks through, the odds are good you will have a move to the corresponding Fibonacci extension.
__________
Tags:
Trader-X, Stocks, Fibonacci, Trading, RNWK
3 comments:
I mentioned that TEVA might be a good long play and I managed to grab some at the 5th 15-minute bar this morning. True to my nature I'm allowing the trade to ride overnight but will probably cash it tomorrow.
J.W.,
what was the rationale for the counter-trend trade?
The only reason TEVA went down was that Merck came out and said they would price their cash cow Zocor below the TEVA generic which is set to market this week (Zocor's patent is done). Merck is destined to lose this war so I believed that TEVA (a good little company) was oversold on the previous day. Thus I put TEVA on my screen and when it started its climb I jumped on board.
I have discovered that many companies are oversold initially on shock news and filter for them.
Post a Comment