I haven’t traded yet this week… it’s a combination of relatively slow days, and I’ve been asleep during part of the market day. But, I woke up today around 10:30EST, and immediately saw Cienna Corporation (Nasdaq: CIEN) acting strong. Okay, a lot of stocks looked strong this morning. But, as the 5MAs caught up to the up stocks, CIEN kept drifting up, rather than sideways or slightly downward. I take that as a very positive sign. Here’s the 15 minute chart prior to my entry:
Add to that the fact that it was brushing up against round number 30, and a massive Ask size at 30, and I knew I was going to play the push up through it. This was a pretty satisfying semi-scalp, since I got out very near the local top, by reading the shakiness of the T&S data. I always feel powerful when I get a read like that correct. Here’s the 1-minute chart of the trade:
1.41 R. Nice. Now, the only question is if I should get back in, when it turns back around…. I’m never good at that. In fact, I’m probably missing my chance while I blog this… :-)
I got out at first sign of weakness, rather than holding, for a few reasons. First, 30 was a major resistance area, and the stock wasn’t doing anything close to 400% volume, or anything. Second, lots of big money was fading this move, as seen by the big ask levels every few cents, and the MM ids on the TotalView. Third, isn’t some sort of Fed speech going to happen today? I’m so out of touch… I need more sleep!
| Stocks Mentioned In This Article | |
|---|---|
| Stock | Links |
| CIEN |  |  |  |
February 14th, 2007 at 10:00 am
its earnings season- forget index/vix vols- volatility on earning surprise stocks is up huge as usuall. why are yo sleeping thru market open. i understand u wait for later setups- but u havent really traded this week? afraid, or more of self-sabotage?
February 14th, 2007 at 10:08 am
@p: ha ha, no I don’t sleep when I’m afraid. And, I have far superior means of self-sabotage! No, I sleep when I’m tired, and I have been tired during a lot of the market days this week. That’s just the way it is, and I accept it.
Despite that, I did try to get in two other trades this week, but in both cases there were no shortable shares available through my broker. Sux.
February 14th, 2007 at 10:59 am
CIEN was really nice. I missed it myself - excellent job Richard!
February 14th, 2007 at 11:04 am
@esto: thx, like I predicted… it gave a chance for a second entry at 30.02 while I was writing the blog post. I’d say my number #1 disappointment with my trading is that I never trade the same stock twice in the same day. I really need to fix that!
February 14th, 2007 at 12:42 pm
nice one!
February 14th, 2007 at 1:51 pm
I was watching CIEN for a dummy trade, but I missed the entry. I was wary of the second bar being so far from the 5-ema, and then the third bar took off.
That is interesting about the drifting upward–I took it as a fake move. I thought that the slow upward drift was a sign of impending doom to come, but I was wrong. What’s your understanding of “market physics” behind that phenomenon?
February 14th, 2007 at 2:34 pm
@Prospectus: look at the convergence of good things on the 15 minute chart. We have an inside NR3 sitting on the rising 5MA, just under a round number. Plus, it’s the only red candle, which acts as a successful test of the OR high. Hard for me to say “no” to all that.
In terms of market physics, we like to see gentle pullbacks, I guess because we feel like we’re getting a deal on our entry. But, a stronger stock will consolidate sideways. Just means the buying pressure hasn’t let up, even though the MMs probably would like to push it down a bit (since they’ve been selling their shares to all the buyers on the way up–which is one reason you often see a 10:15AM reversal). In today’s case, it only moved 0.67% up over the 1.25 hours after the opening bar, so I didn’t think it was going to run out of energy yet.
I knew I didn’t want to hold it, though, because the volume and trading wasn’t frantic enough. And, by end of day, it fell all the way back down to my entry price.
February 14th, 2007 at 6:50 pm
Ah, I see. I was only watching the second-third bars on CIEN this morning. There was a nice NR inside entry as you said, and it would have been a big winner. You could have also scalped the move at 12:15-12:30 that finally passed the peak where you exited, as you say. That would take nerves of steel! Great trade.