Trader MD

SOHU, from the watch list, formed a nice orderly symmetrical triangle, which failed just below 77.

You'll notice as I was annotating the chart for SOHU, it began to break down out of the triangle/channel. I passed on this trade as SOHU was still above the VWAP (Volume Weight Average Price) for the day. In addition, I've seen that failed moves in 1 direction tend to exaggerate the move in the other direction.

If volume had picked up considerably to the downside and offered an entry point below the VWAP (which was ~75.50 at the time), I would have been more open to looking for a short entry.



JASO formed a bull flag after gapping up and was holding up fairly well considering market conditions and how FSLR was acting. I got whipsawed out as sellers came in at the ~23 level. While it went on to run much higher for the day, I let my stops work for me.

I was a bit aggressive with the trailing stop after exiting a partial position just below resistance, but with the market conditions and with SOHU reversing on me, I didn't want JASO to reverse on me as well.



While I was a bit aggressive with JASO, I still would say I did a decent job managing the trade.

That clearly was not the case with OII.

I've noted my lessons from the trade on the chart. I clearly didn't let my stops work for me.

OII could have been a big winner.



Below is the daily chart for OII. Today's gap up knifed through the down trend line of the recent triangle type formation. I didn't enter at that price of ~68.50, but instead waited for it to settle down and entered a swing position (separate account) as it broke back above the ~69.48 level (which is also where I simultaneously entered my day trade that I highlighted above).



Have a good weekend & get some rest. Next week is options expiration and we'll have a fair bit of economic data.



I'll be out of town for part of it and celebrating the other half with mom. Happy mother's day!

Posted by Trader M.D. at 12:28 PM 0 comments

Labels: Flag, Gapper, JASO, Lesson Learned, OII, SOHU, Swing, Triangle

It just goes to show you that you should trade what you see and not what you believe will happen. If you asked me yesterday and with the initial reaction to CF's earnings after the bell yesterday, I would have guessed the Ag sector would have continued lower and I did mention that in last night's watch list for today:

That probably would mean more selling for Ag, and more break downs for Coal, Steel, Energy, Solar names.

Woops :) Anyhow the Ag sector started off slow and then they all started to move higher one by one. I went through all the charts of sector and found IPI forming a nice Cup & Handle.



SOHU was from last night's watch list. It was forming a nice bull flag on the multiday / daily chart. Some @#$! analyst at Citigroup upgraded it in the premarket to have it gap above the bullish flag.

It probably would have been a pretty nice swing entry on a break of the bullish flag, but I didn't want to chase it.

Anyhow, it set up with a bull flag later in the day. I only got a partial fill so I scrapped my trade shortly there after.




Have a good weekend :)

I'll be watching the 2008 NFL Draft. Go Niners.

Posted by Trader M.D. at 1:16 PM 6 comments

Labels: CupnHandle, Flag, Gapper, IPI, Lesson Learned, SOHU