Great Entry, Awful Exit

We found this TC chart at the end of December and were wowed by how gorgeous it was:




We exited much too early as the stock is still running:




Note to self -- it doesn't come often when one finds an aesthetically drog-dead gorgeous chart. Next time, have faith, put on more size, and then HOLD!





What went wrong? We have this inherent disdain for cheap stocks that we need to overcome. We didn't put on enough size on the stock so didn't take the trade seriously.

Numbers for the week

Percentage moves from trigger numbers posted night before for this week (Jan 04-08 2010):






We're mostly daytraders but our entries are based on daily charts so they often tend to also work well for swing trades.

This week's triggers

Here are our triggers for this week -- arrows/lines were the buy spots put the night before the trigger. A few flat, a few losers, and decent amount of winners. This represents ALL the stocks that triggered from our newsletter Mon-Friday this week. As you a week full of opportunities for day-traders and swing-traders. We're going long into the weekend QCOM PCU CAT CVX DTG MICC

Triggers

A couple of triggers and swing trades for today:

RIG 92 from last night's newsletter worked so far for a point -- look how it is riding up the 20 EMA -- perfect for trailing stops (good job BartinBC)



FSYS from last night's newsletter worked for 2 points -- buy close to the base, take profits away from the base as stock gets extended away from EMA.




CAT we wrote last night that 60 spot was iffy and that we were long the name already. It didn't set up on a daytrade basis but we like the chart on daily. We came into today swing long CAT PCU QCOM (all posted real time on our twitter acct)
and added DTG CVX and a new stock for us, MICC (hat tip @ldrogen)



What is amazing about this "easy market" is that all you have to do is go through your watch-list, buy them all in anticipation, and watch them break-out the next day. It takes an extremely benign market for this to work -- and we'll do it as long as it works.

Buying Support

One of the most gratifying things about trading off support and resistance is that you can sometimes get a 2 for 1 deal in that you trade long on a break-out through resistance and then buy the pull-back to the same spot which now has turned to support.

Here are two trades from this morning:

As you can see GOOG had a small break-out spot at 600 from December. We put that in the newsletter last night (and posted this morning on our Twitter/StockTwit Account)
that we were looking to buy 600.



The stock came within 62 cents of the number (which is amazing considering it's a 600 dollar giant) with the added bonus of S1. Very nice trading opportunity.




A few days ago we had a buy spot alert on APA at 106.5.




Very nice bounce at the number and again with S1 help. One of the things we repeat ad nauseum to our readers is to always trade more aggressively when several ducks line up in a row -- a reverse on a bounce is great but for a day-trade having a stock come into the number and hit S1 at the same time is just a nice bonus.






These were both day-trades and we are out of the positions. We think that GOOG has a date with the 50 SMA and that ultimately APA will also fail support. However nothing goes down straight and there often are great daytrade opportunities long on down days (within bull trends). We won't get into any swing trade positions on support until the pull-back shows a bit more teeth.

HMIN another one we posted in Twitter yesterday near 38 -- we had this on a breakout and it worked as a daytrade yesterday on a bounce on the same level. Very good continuation today.

Bread and Butter Daytrade Set-Up

AONE has a daily spot at 23.5 -- stock spiked up away from base, came close to resistance, and reversed. As you know, we never buy on top of an extended spike so we waited for a pull-back/good entry. We found one on the test of P/20 EMA (on 5 min chart). We bought the bounce on that test with average 22.6 entry.




Our initial stop was 22.4 (low of that test).



Stock rides up on the 20 EMA but needs to break above that R1 wall at 22.8 with a volume spike. The longer it takes the higher the chance of failure as the EMA flattens out.




EMA was tested but candle closed above -- that low became the new stop around 22.6.



Stop keeps moving up with the EMA -- now a risk free trade since stop is over the 22.6 entry. Stock pops over 22.8 and takes out R1.



Stock takes out R1 but reverses and with that we take off half the position for just over a dime as we are thinking it will fail.





AONE is a momo stock and this kind of action just doesn't make us feel bullish. We exited the rest of the position on yet another test of the EMA. If stock reverses this afternoon over 22.8/22.9 with huge volume burst we'd probably try again.



We made nothing basically in this trade but it's a great example of how we day-trade, day in, day out. Our whole trading strategy is based on the confluence of daily spots and intraday set-ups. This set-up was a very typical one that we do almost on a daily basis (it usually works, really). We've shown a lot of winning trades over the last little while and it only seemed fair to discuss a no-go.

QCOM

On a day with tech weak the stock had a nice move as investors are buying the stock on news that its Snapdragon processor is being used in Google's new cellphone the Nexus One.

We like the base on the daily chart and are looking to initiate a position trade in the stock for our longer term account.

Before and After

All the following were posted under our twitter account yesterday before the break-outs (and for BHI this morning before 42 break-out):


http://twitter.com/HCPG

Join us on Stocktwits. and chart.ly





BHI trigger was 42 (41.5 start over 50 SMA)





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XLF trend-line break continuation:





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BAC break-out:





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TC break-out: