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Wednesday, January 10, 2007

AA - 011007; 15-minute chart



1.) What did I see?
A gap up, with price making a nice move up and then an orderly pullback in the first eleven bars. The second-fourth bars moved above the opening range (OR) high, and the next four to five bars moved back below that level but found support at the rising 5MA. The eleventh bar closed back above the OR high, and formed a nice "hammer-type" candle.
2.) What is the entry?
A break of the eleventh 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 just before 3:00.

Set-up grade = A-; overall it was a nice set-up with smooth price action and orderly movement.

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16 comments:

lbcando said...

thought LFC was interesting... took an entry above 18th....15m bar. Began showing strength and cleared OR while hugging rising 5 ema..overhead the 34 was some .80 away where i took profits. If there are some apparent weaknesses in this setup , please comment.

Also aapl looked good to me although with considerable risk...entry above 2nd ..15m bar.
Thanks,

Lbcando

greytrader said...

Nice trade X, I got out at the 17th bar... Should have left stop at breakeven. Did you think about getting out ? It looked to me like there was resistance at the 1/2 FIB.
Oh well, I made some money :-)

estocastica said...

Beautiful.

Gary said...

Interesting charts for practise

AAPL(15'), BIDU and WYNN(30') SHLD(30') ICE 30', PRFT(30') MGM( 13:45 candle with casino frenzy in full swing) LVS 12'o clock candle 30' broke the OR earlier hence was on scans( 11:45 candle on 15' wouldve worked too--spinning top 11:15--inside candle 11:30--break of inside bar@11:45 is entry), WYNN( this was a hard one to spot--it broke opening range later on the day and set up after pulling back some--MGM and LVS were more obvious

MXWL too--no shares to short though--beautiful set up

SPWR 30' set up ( from HCPG trigger--had it as a winner earlier)

Trader-X said...

greytrader - the seventeenth bar was the first to break the 5MA, and I was waiting to see if the next bar took out its low...but it didn't, so I stuck with it.

lbcando - looks like you made a decent profit. You have to be more cautious and watch those trades closer when you are going against the gap.

estocastica - obviously you were looking at Victoria's blog when you made that comment.

KayakHandy said...

What a great trade in AA! I took the sympathy trades also in AL, ACH and CENX. You could see these comming from a mile away.

Quick market Analysis for maybe Thursday and Friday of this week and probably going into Monday of next week.

The fast and large run up in AAPL and all the speculated suppliers to the Iphone will see some profit taking(I DID!) This will probably cause the QQQQ's and the SMH to go lower in the near future for a short time, maybe longer because this is the time of the season to usually get out of Tech. until June-July timeframe to start buiding positions for the second half of the year(holidays).

In my humble opinion this will give any shorts another chance to cover the 4.5% short position in AMD and offer up INTC...when this happens I will take bigger positions. I am long AMD and INTC right now. I think Goldman Sachs, Think Equity, American Technology research and the two other companies that make a market in AMD are ALL WRONG calling for AMD to have an earnings warning and even worse, lowering 2007 guidance.

I also think it's time to have your earnings seasons trading plans in place: example, the low earnings expectations of AA that were easily blown away from higher Aluminum prices and lower energy costs. Its why AL with much better cost controls and management will keep going up for a short time, AA really does have a really low value and needs to go up somehow.

I really want to short YHOO with some PUTS but have some fears they did better than I think over the last Q...if someone could help me out with this call please chime in.

It looks like OIL and OIL services stocks and ETF's are still in a free fall, I have not a clue how low they will go or how long it will last but as you know I am SHORT the oils because the big players are unloading the sector with a vengence. Picking bottoms in a falling sector is a fools game, however it can be smart to start a very small position on the long side in a few stocks for the long term investor, My best guess for how low oil will get with the "soft to medium landing" macro economic outlook says we could see OIL down to around 46-49 bucks per barrel of light sweet crude(maybe lower with market over reactions). I will start a very small postion soon in HAL, RIG and DVN for a long term investment because my longterm outlook for OIL is still very bullish on global growth and these companies have so much worth...not really day, swing or positional trades but thought I would throw these at you because they offer so much upside.

There are NO more than 6 Nuke plants that will come online anytime soon globaly over the next 3-5 years and none in the USA for a long time. Right now oil is high in supply but I believe time and global demand for energy/power will make a comeback.( Crazy Longshot here" 'but is possible...Isreal could nuke Iran in the future sending oil prices to the moon...more reasonable scenario is that Global growth once again puts strain on oil supplies, drilling capacity, maintanance and machinery. I don't see this even starting to happen until fall to winter of 2007.

Gary said...

Ibcando,

Why go against the gap?? Opening gap reversals happen but not as much as we'd like to think--LFC had support from daily pattern to attract buyers but it worked good for you :)

AAPL break of third bar was also HoD, at that time FIbb 23.6% seemed so far away near 97.52 but it went for it.

Tom said...

Nice analysis Kayak, thanks for sharing.

Gary said...

CSCO sues AAPL for IPhone patent --:) fun begins now LOL

Anonymous said...

Trader X - I am new to this and wanted to know why you did not get in at 4th bar - what were you waiting for or did not like at that point? Also, after your entry 5 bars later it starts turning bearish - what keeps you in and how do you know (or suspected) it would reverse course to hit your target? I am watching these charts and I see these little reversals and not sure how to know to ride them out until they reverse or whether to cut losses - this goes back to the first part of my question if I got in at 3rd bar what do I look for to make sure I ride it out vs. selling with that first reversal - thanks. - JTT

Dan said...

Hi,
Any idea why esrx (15min) below the fourth candle hammer didn't work out?

Anonymous said...

JTT, where was the entry on the 4th bar? Its high was not taken out. And third bar was not a good signal, long upper and lower tails. Plus, X likes entries when the 5MA is close...it was well extended from the 5MA at this point. He talked about when it turned bearish in his comment above.

Dan, I would not have traded ESRX...but hindsight is 20/20 and I cannot tell you the exact reason. I think it was the long tails on both the 2nd and 3rd candles. I DO see what you were looking at, and all I can offer is that it was one of those that did not work. That is why you always have a stop! Maybe someone else can offer a better insight...

Tom C.

Gary said...

On ESRX, can't really say anything why it didnt work--prolly put it in the 20-30% category that dont work thats all--Just my humble opinion on 15 mins I look for .3--.5% stop and on 30 mins about .3-.5% stops or close unless really compelling and for a candle to actually be considered broken add the break point + spread on the stock. Similarly while placing your stops--given it will widen your stop a bit but less chance of failure.

Inept Trader said...

I always have a hard time trading the stocks with links to a commodity price, since those stocks tend to fluctuate exactly the same as the commodity.

Is my concern legit or do I just need to trade the chart?

Thanks,

Slowly-becoming-less-Inept Trader

Anonymous said...

I don't look at the stock, the market, the industry, the commodity, or anything. I am trading it, and am in and out in a matter of hours...sometimes less. Why do I care about the underlying commodity?

A chart is a chart. A setup is a setup.

TJ

KayakHandy said...

Life is a Byatch!

AMD just gave an earnings warning, just like the Analyst at Goldman said they would! Maybe next time I will listen to them...no not my style" 'Mama always told me life is like a box of Chocolates, Stupid is as stupid does...Hi my name is Forrest and I am a recovering idiot!

I must take the loss of about $0.52 per share so far and lick my wounds....

On the bright side ,you do have to love how the oil traders are like lemmings and run for the exits in droves! Short OIL and long Tech.