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Saturday, June 27, 2009

WR - 062509

Posted by Tom C.

I am fortunate that the first six months have been very profitable, so it allows me to take some time off. I took yesterday off, and because next week is a short trading week (due to the July 4th holiday), I will be taking a few extra days off.

Here is a trade that is a little different for the weekend. Trader-X often talks of my "u-turn" setup. One thing I look for is a gap above the previous day's high and a move back down to that high where price establishes support. It doesn't always happen, but when it does it is a great setup. As you can see from Chart 1, the 4th bar is a "hammer-type" candle and the 7th bar is a strong candle that rallies off the 8EMA (and both bars find support from the previous day's high - the black horizontal line).

I entered on a break of the 7th bar high and held the stock until late in the day. It rallied nicely, and made a run at the morning high but stalled out at the halfway point between the 50% level and that high (Fibonacci lines plotted from the morning high to low). I sold at $9.08 as price rolled over from the second attempt to break away from the halfway point (top yellow arrow, 2nd chart).



Thomas said...

Thanks Tom C. I trade the u-turn with great success thanks to the posts I read here over the past year. Have a good holiday.

Jeff said...

Take a look at CHTT from Friday. I believe its the same setup!

bl said...

It doest hit the PDH...almost. Tom, Any suggestions if one doesn't have a fully autommated system that with a wuush of a button Top 20 % charts populate your screen with fibs, s/r line, your criteria? Scottrade, btw. Not ready to change yet. TIA Have been looking at ptremkt upgrates, intiated, resumed for ideas. kirk ffiv bcsi Fri, and ROCKED

Bill said...

Great trade Tom, and great posts in X's abscence. Enjoy your time off.

Anonymous said...

Hi Tom, could you please review today's CMI 10min chart for me? I was wondering whether 4th bar is the similar setup. I almost got in when it broke 4th bar high. But I was concerned because it was so close to ORH, so I did not take it. Do you think it is good setup to trade? Thank you.


Eyal said...

why didnt you enter at the break of the third bar at WR?

Chris said...

Hi Tom,
I was curious as was Eyal about the break that you entered the WR trade on. Could you explain it a bit further, what was broken at the 7th bar?