3 Trades on Rowan Companies, Inc. (NYSE: RDC) Wednesday

It was an unusual day for me. First, I overslept, and the trading gods punished me for it by making some of the best picks from my scans cross their triggers early in the session. So, I missed a lot of nice morning action. That’s really too bad, but then again, it’s nice to be well rested, too! :-) Life is good…

So, with the main list candidates already through their target prices, and an FOMC event coming up, I nearly just walked away. Instead, I thought it might be fun to scalp on RDC some (it was one of the profitable candidates I missed). I traded it 3 times, for 2 wins and 1 loss.

Ok, so the Rowan Companies, Inc. (NYSE: RDC) trades:

First I bought the break of 35.00 around 11:50. My target was the HOD, since I thought it would run up to it and fail. I got characteristically jittery since the dow was pretty negative, though, and bailed too early so I would start the day with some profit.

Then, completely contradicting the logic from my first trade, I bought the new HOD. It was acting pretty strong, so I called it a “just in case” trade. As I had previously expected, it failed, and I got out for a mere 4 cent loss. No big deal. At least I didn’t let it go all the way to my stop like last week!

As it kept failing, I decided to enter a trade when it fell through the trough between the double top. (you can see it @ 34.86 or so at around 11:15). So, to avoid getting mindlessly chopped up again, I let it drop to 34.80 before going short. It stalled out @ 34.73, and I bailed at 34.74. That turned out to be a good decision, as it was stuck between 34.70 and the HOD for the rest of the trading session.

What can we learn from this and several of my trades last week? Stocks are not breaking out at HOD or LOD very reliably right now. They just, aren’t, unless they have a ton of volume. It would actually make me a lot more money to short the HOD and go long the LOD, but I am not quite ready to put a strategy like that into effect yet. Would have worked out great today, though…

I haven’t totalled it up, but I can tell in R terms that I haven’t made up for last week’s losses, yet. But, it sure feels good to be making money again! And, even having taken Monday off, I already traded 5 times this week, so I’ve still kept my number of trades up a little from my July-September timeframe. That’s all very good.

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