This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
LJ International Inc. (NASDAQ: JADE) is some sort of publicly traded smallcap stock. I really don’t know what else it does, but it sure had a sweet (albeit a bit scary) looking chart. I got the idea for this trade from TradingGoddess
1. Why did I take this trade?
JADE opened with a lot of buy volume on Tuesday. My alert went off when it broke above Friday’s intraday high @9.50. I watched for a pullback. It refused to go below 9.50, so I bought on the reversal back up @9.55.
2. What was the initial stop?
Initial stop was low of previous bar @9.30.
3. Why did you exit where you did?
I sold @11.55 on what I perceived to be a reversal on the 5-minute chart. I had a pre-conceived bias to exit this stock quickly. I was looking for any excuse to avoid being the last person in the game of musical chairs.
4. Is there anything you would do differently?
JADE is so overbought it hurts to think about it. But the technical indicators saying that it was overbought became irrelevant today, there was still plenty of buy volume and still plenty of buy the dippers.
I posted my trade on the 15-min. chart, but I was actually watching the 5-min. chart during my trade. Had I been watching the 2day, 15-minute chart instead of the 5-minute chart (or better yet, watching both), I would probably have stayed in the stock a bit longer for its morning run up to 12.40.
I actually tried to scalp the drop from 12.50 down to 11.20 this morning, but unfortunately, my broker told me they were unable to locate any JADE shares to short due to internal technical issues. Bummer.
| Stocks Mentioned In This Article | |
|---|---|
| Stock | Links |
| JADE |  |  |  |
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
February 22nd, 2007 at 6:46 pm
Curses! Another .png! Muddy was watching his one today in his chat room. Chasing those stocks sure is fun, though I have to admit that I’m not capitlized well enough, nor do I have the time to follow all day while I’m at work. I wish I could use the same principles of looking for activity and new highs on a daily level…
Great trade, Phileo! Hope your position size helped you make a ton of loot on this one.
February 22nd, 2007 at 10:09 pm
@Prospectus: Thanks!
IMO, The only good entry on JADE for today was right near the open….. that or right after I sold !!
Yeah, at least I recovered my losses on Wi-LAN (and then some) with this trade in JADE.
February 23rd, 2007 at 1:52 am
You say your alet went off. What software do you use for alerts?
February 23rd, 2007 at 6:17 am
@Prospectus: I use the real-time alerts feature that comes with my TWS software from IB. IB’s charting sucks, but I guess it doesn’t suck enough to make me learn how to use QuoteTracker.