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Monday, December 04, 2006

IBM - 120406; 15-minute chart




1.) What did I see?
A gap up and consolidation in the second-sixth bars. This is a good example of how price will move sideways or pullback when it is extended from the 5MA. The sixth bar prints a textbook hammer on the rising 5MA; this was a riskier entry as it was below the opening range (OR) high*. Price rallies with the next two bars, and closes above the OR high. The ninth-twelfth bars pull back to test that level as support, with the twelfth bar bouncing off the 5MA and closing above the OR high. This was a more conservative entry.
2.) What is the entry?
A break of the twelfth bar high.
3.) What is the exit?
The target was the Fibonacci extension of the previous day's low to the OR high. It was hit towards the end of the day (note the reversal around that level).

Set-up grade = B+; the riskier entry mentioned above was a C+ as it was below the OR high.

*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.

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4 comments:

Sam said...

Great trade. I got TEX on the 30, break of the 9th bar as it moved above the opening high.

Tony S. said...

KYPh as it rallied into the close off the opening range high test. 2:30, 30 minute bars.

Flatwallet said...

KYPH was nice...I picked up BLUD, it did well for me

QQQBall said...

KYPH - nice move after a really wide range 15m bar on the open. when i see 'em that wide, im looking to working with S/R of the first bar O/H/L/C.

i just have troublke taking a trade like BLUD. but i can buy a test of the OR low on the 7th 15m bar on BK. its gonna be a while before i take a trade like BLUD - and the whole sector better be moving too. its a weakness, i know.

good trade misadventures.