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Thursday, January 18, 2007

NVEC - 011807; 15-minute chart

NVEC provided a great opportunity today. I would have preferred that the 5MA be closer to the trigger/entry bar, and that the actual entry had been below the OR low. But, the perfect set-ups only come along every other day!

: )

NVEC gapped down and printed a wide-range first bar. It left long upper and lower tails which indicated indecision, but it did close red. The second, third, and fourth bars consolidated in the first bar's range, and the fourth bar was the narrowest range of the morning (NRM). It also left a long upper tail (bearish) and closed weak.

I entered on a break of the fourth bar low*; the target was the Fibonacci extension of the previous day's high to the OR low. It was hit four bars later, and NVEC continued to fall. There was a good opportunity for a "beyond the Fibonacci extension" entry around bars eleven and twelve (I did not take it).

Set-up grade - "B-" for the reasons noted above.

*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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Jamie said...

Nice work X! Looks like another NR7 range contraction / expansion setup.

estocastica said...

Great trade.