It’s pretty incredible the trade-rate I’ve kept up in May. The trend has been to make 7 to 15 trades a month. This month, I’ve made 21 trades so far, with about a week left to go. I hope it’s not a fluke! I think jaiku and wallstreak help keep my mind from wandering. People keep asking me what I think of this stock or that stock, and before long I’m placing a trade on it. :-)
Trade 1, CHB
Anyway, I made another trade at the open, this time in Champion Enterprises, Inc. (NYSE: CHB) for 1.93 R. The intraday chart is pretty meaningless, but I was playing a run up to the daily number from my 30-day High scan (I feel compelled to point out when I use the scan, now, since Prospectus asked me if I use it anymore).
Trade 2, HANS
The more interesting trade was the second one, on Hansen Natural Corp. (Nasdaq: HANS). As you can see from the daily chart, it’s consolidating a bit lately, but in a general uptrend:
… So, I would normally want to go long. In fact, I told Prospectus as much. But, later, I started to change my mind. HANS started looking like a more reasonable short. Here’s the intraday PNF, marked up with what I focused on:
… In my mind, it was starting to get volatile, with false breakouts both on the long and short side. It gave a sell signal on the first red line marked “pressure”, which I would never take, because (1) it’s against the trend, and (2) it would need to clear 41 before I would be comfortable. Then, on the second line marked pressure, it appeared to be pushing on 41. Interesting. I thought I could at least scalp a pop through 41.
Then, I pulled up a 5-minute chart, and saw this sort-of descending triangle. So, I decided to make a descending triangle play instead of a straight scalp. At my entry, the most recent high was 41.16ish, so that was my initial stop.
The trade got scary initially, because a lot of volume stepped in to push my trade into the red. But, until the price makes a higher high, it’s still an intact downtrend. It made a lower high at 41.06ish and I lowered my stop once it backed away. Then, it finally fell through 41 again. At this point, a decision has to be made… get out now, or try to ride it out. I watched it trade for about 30 seconds. Sellers were reluctant to offer shares below 41.99, and the ask had a very annoying habit of hopping back up to 41.01. So, I decided to get out.
Sadly, the spread was so wide, and the ask was so thin, that the only way I was going to make a profit this close to my entry was to exit with a limit order. So, I reluctantly put in a limit order for 41.96. From the first partial fill to the completion of my order, it took a full 3 minutes for them to sell me enough shares to cover my short. Was that because there were other bids competing with me? Nope. I could see on TotalView that I was the only one sitting on the bid, and I had the best bid. The damn sellers were just not wanting to be the sucker that sold at the bottom. I can’t blame them… after all, I wanted out for the same reason! Anyway, when my order finally filled, a few minutes later it broke way down for what could have been a 50+ cent gain. Oh well, 4 cents doesn’t sound like much, but I assure you it was enough shares to be meaningful $.
| Stocks Mentioned In This Article | |
|---|---|
| Stock | Links |
| CHB |  |  |  |
| HANS | | | |