The second trade of the day was in AMR Corporation (NYSE: AMR). This stock is primarily American Airlines, and for two days now, airlines are hot hot hot. I had missed the entry I wanted into Continental Airlines (NYSE: CAL), due to a mid-day nap. (I stayed up too late last night!) I was trying to wait for AMR to make new highs for the day, since that would coincide pretty well with my watchlist price, but it was trading in a narrow range, and I bought the break.
As with my other trade for the day, the break I bought did not have impressive follow-through. It just meandered around my entry price, within 5 cents either direction. Boring, to say the least. It eventually made a small push in my favor, for about 11 cents. It picked an interesting time to do it, too. I was seeing sell-offs here and there via the TICKs, and the $XAL airlines sector was now significantly off its highs. There are two schools of thought when that happens. First off, you could say “Wow, look at how well this stock has held up during the selloffs. Look at how strong it is relative to its sector.” Or, you could say “Any second now the enthusiasm on AMR is going to wither away, and it will snap back to its place with the rest of the markets.” I try to decide which camp I’m in based on whether there’s any special volume, or positive news on the stock to set it apart. In this case, there was neither, so I took my 11 cents as a gift, and got out.
Here’s the chart, with an unfortunate bad tick making it a little hard to read (click to enlarge):
In this case, my exit was close to the highest the price would get for the rest of the day. So, I can’t complain at all! I got filled for some of my shares at 24.80, and I don’t think it got higher than 24.81 for the time frame I was watching it. My average exit was 24.778ish, for a 0.4R profit.
So, two trades, two wins, on a kind of tough day if you ask me. Lots of good looking short options were dangling in front of me all day, but the markets kept drifting up all day. It was hard to resist them!
| Stocks Mentioned In This Article | |
|---|---|
| Stock | Links |
| AMR |  |  |  |
| CAL | | | |
October 3rd, 2006 at 4:03 pm
Hi Richard,
Nice trades. Since you have been posting your trades here I have noticed most are scalps, are you mostly a scalper or is it just the market we are in? Keep up the winning streak, articles and vids ya. Oh ya, perhaps a 1 min chart would be a better visual as 10 min does show well?? Oh ya again, do you trade off 10 min?
October 3rd, 2006 at 6:23 pm
@Glenn: It’s just the markets lately, really, but I am a scalper at heart. So when the markets are tough that’s what comes most natural. When the market goes chop chop chop I pull the plug on my trades at the first sign of trouble.
I don’t really consider today’s trades as a traditional scalp, really, since I was in both trades today for about 30 minutes each. I tend to think of scalps like the 0 to 5 minute trades, but I guess everyone has a different idea of where that cutoff is.
I tend to trade off 10 minutes, yep. I always post the chart that I think looks clearest out of 5, 10, 15, 30 min candles. You can see all of those at http://www.stocktickr.com/chartreview, as all my trades will be posted there as well.
October 3rd, 2006 at 8:14 pm
I should add, when the markets stop chopping so much, I will go back to 30 minute charts as my primary time frame to trade. But, lately, 10 minutes has felt much better.