In comments of the last post, t-money asked:
I was watching GILD today (8/16) on the 5 minute chart and was wondering if this was a setup that you would have considered?
It did not have a gap, but did shoot up over yesterday's high right away in the morning. I was looking to enter on either the 5th or 6th bar, but didn't consider either strong enough to take.
The stock took off immediately after those bars without me. Is this a good candidate, or not convincing enough even though it worked out?
Mike offered up his opinion:
"t-money, I traded GILD today. I trade based on X's textbook setup, of which GILD was perfect as it bounced off the retracement zone and had support from the 5EMA. But, I don't trade gaps exclusively. I scan for stocks that move up or down in the first few bars, and then pullback to the rz. GILD had a nice move up in the first two bars, and a perfect pullback and reversal.
As for me, if I looked at non-gappers, I suspect this would have been a setup that I liked for the same reasons Mike pointed out above. Good trade!
note - I indicated the trigger bar that I assume Mike used for his trade, although he didn't specify. Also, I assume he exited at the Fibonacci extension (FE).
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