Jamie-Style Gap Trade: NIKE, Inc. (NYSE: NKE)

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I traded NIKE, Inc. (NYSE: NKE) today, and the setup was one that Jamie has showed us on his blog in the past (here’s an example). I traded off of a 15 minute chart, and gave running commentary at Wallstreak. I also got good comments and input from other traders that was valuable to learn from, but for this trade I still stuck with my trade plan (which is what everyone should do). The time to make changes is after a trade is closed, not while it’s open.

The Chart

The Setup

NKE gapped up and retraced 38% of the distance from the OR high to the prior day’s low. After the retrace, NKE set up a narrowing consolidation with a rising 5-ema close by. The third bar printed an inside NR3, and the second and third bar highs made a nice base near $56.25. Red flag: narrowing range wasn’t that narrow, which led to a wide stop and smaller position size.

The Entry Trigger

I went long when price broke out of the base and was filled at $56.25. My stop was a few cents below the previous bar, at $55.73. Target was the 119% fib extension, based on it also aligning with the recent high at $57.58:

Trade Management

I moved my stop to breakeven after an entire bar cleared my entry point, and after the 5-ema rose above my entry point. I was watching for a pause at the OR high (~$56.93), and after an inside NR7 printed, followed by some red, I sold at $56.83. If I had no limit on my daytrades, I would have taken a partial there and let the rest go to the target, or back to breakeven, or exit at the close today.

Trade Summary

NKE Long 40 Shares
Entry: $56.25, Stop: $55.73, Target: $57.58
R: $20.80, Exit: $56.83
P/L: 1.12R, or $23.20

Trade Grade

UPDATE:

Looks like I should have held!

Stocks Mentioned In This Article
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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com