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Wednesday, August 09, 2006

JRCC - 080906; 15-minute chart

From my emails, I know several of you took this trade.

1.) What did I see?
A gap down and wide-range, weak first bar. The second bar breaks the opening range (OR) low, but leaves a long lower tail that is somewhat of a "red flag". The third and fourth bars narrow in range - the third bar tests the OR low as resistance and leaves a long upper-tail. The fourth bar in the narrowest of the morning (NRM), and both stay below the OR low.
2.) What is the entry?
A break of the fourth 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 shortly after Noon. The total for this move was just ~6.5%.

Set-up grade = B (the long lower tail on the second bar bothered me, but was offset by the close below the OR low)

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