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Wednesday, December 13, 2006

Wednesday's action

posted by Tom C:

I always notice that things get crazy at the end of the year, and I see a lot of cheap stocks quickly run to lofty levels. So, I like to keep an eye out...

Today PGLA popped up on my watchlist. It gapped up, and quickly rallied $3 to the Fibonacci extension of the previous day's low to the opening range (OR) high.





It then pulled back and printed a nice hammer (on the 6th bar) at the rising 5MA, just above support from the OR high. I entered on a break of that hammer (which was also the narrowest range bar of the morning (NRM)), and held on for a nice rally (see above chart).

For the exit, I re-drew my Fibonacci lines - plotting them over the morning's low to high. As you can see the new Fibonacci extension marked the high of the day...price promptly reversed at that point (see below chart).




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6 comments:

Barry said...

Unreal. I had this on my watchlist too and watched it all day long, but did not pull the trigger. Arghhhhhhhh.

Chris said...

Nice trade, and great tip on redrawing fibs. Thanks Tom C.

Raider7x said...

Nice trade Tom. I had the most boring trade on earth. IBN long above the 6th 15 min bar high. One of them two bar reversal dealios X has spoken of in the past. Also as you can see the 5ma was close at hand. I moved my stop to breakeven on bars 11-13, in the name of the Phantom(and Zoomie :) ) and thought for sure i was dead meat but it somehow kept chugging along. It never reached the Fibonacci extension target and i closed it at the end of the day.

-Raider

Trader-X said...

Nice Tom C. I had it on my watchlist, but did not know what to do with it! See you guys tomorrow.

Flatwallet said...

Raider: I had the same setup but I read Zoomie's interview after I moved up my stop and got stopped out for a 17 cent profit instead of a 35 or 39 cent profit.

Anonymous said...

I had my trade of the week today - SBS, 30-minute chart. Bought on a break of the 7th bar high as it crossed the OR, and sold at the close of the 9th bar because it left a long upper tail, and was above the Fibonacci extension.

TJ