This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
I took three trades today: 1 daytrade and two NR7 swings from my watchlist. The whole HANS saga unfolded in real time on Wallstreak.
Daytrade: Hansen Natural Corp. (NASDAQ: HANS)
HANS gapped down today, and rebounded impressively. It then consolidated for a long time, printing 5(!) inside NR7’s on a 15 minute chart:
I started watching on a 5 minute chart, and it was really contracting. The Bollinger Bands were inside the Keltner Bands, which also denotes a volatility squeeze (indicated on my chart by the orange background behind the price). I thought it would break out big one way or the other, so I prepared two scenarios to trade, both long and short. The dotted lines show my entries and the solid lines the targets:
HANS broke down, so I went short:
15 minutes later, Richard, who also traded it, covered his short. I kept mine open, holding out for more profit. Since there was no selling pressure, price retraced and I covered near breakeven:
After the trade, I looked at a volume-based chart with the Bid/Ask Trend, and saw this:
Trades were flying off at the ask during the whole decline. That would imply that buying pressure was meeting the selling, which is what Richard saw reading the tape. I hope he posts more about how to read that!
Later in the day, after another Bollinger/Keltner squeeze, and after HANS’s conference call, things exploded to the upside:
This trade would have easily made my target of $39.30. Too bad I was out of daytrades. :( Stupid SEC…
I also entered two NR7 trades from yesterday’s list. I was stalking AGP, ZRAN and VG (long only) due to my estimation of the best risk:reward. I entered chronologically based on when they broke: AGP short @ $26.78, and ZRAN long @ 20.11. AGP closed in the money and ZRAN is barely underwater; VG didn’t go up so no entry. A few others on the list moved today–here’s how they did:
| Stocks Mentioned In This Article | |
|---|---|
| Stock | Links |
| HANS |  |  |  |
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
May 7th, 2007 at 3:55 pm
Nice, now I don’t have to blog my one trade today. It’s past my bedtime anyhow.
At one point on wallstreak you pointed out that HANS had 400% volume, but I didn’t see it because I was only watching the stock tab. Yeah, that’s true, but most of that was on the big run up at the open. I was watching a volume chart with 500,000 shares per bar, which made it clear that–relative to that morning action–nothing special was happening volume-wise during the short play we had on. Later, during the long trade that I missed, volume came back on in a big way, and candles started printing quickly again.
I think, like a lot of trading guidelines, people take relative volume too literally sometimes. The fact that we had huge volume at 10AM doesn’t really do much for my noon trade. You know?
May 8th, 2007 at 5:50 am
@Prospectus - I think you might have something going here with your NR7 scan…..