From yesterday, on AMZN:
"This Double Bottom possibility is why I think that 'taking some profits when the Bear Flag target got MADE' is warranted, by the way."
Yesterday's action is a good example of why it's a good idea to lock in some gains when targets get MADE. All of the profits from the Bear Flag breakdown crossing 85.966 evaporated as of yesterday's close at 85.96.
Regarding the yellow line of the chart:
"Traders who want to put a tighter leash on their short position would move their stop down to just above that level (84.60's)"
When that level got taken out to the upside, AMZN headed for another retest of 85.96 - 86.00.
"...it failed again, at 85.96 (the second arrow), which was the exact number where the Bear Flag broke down."
The print high after the Fed news was 85.96 exactly, prior to the final hour breakout. The close was 85.96 exactly. Tell me again what they say about the market being "only random." ;)
"I wouldn't want to see DOUBLE RESISTANCE at 86.00 get taken out to the upside ..."
Oh, my. If I were coaching the AMZN Bears, I'd have to give them a thorough tongue-lasshing for allowing the Bulls back up here for a FOURTH retest of resistance! The Bears proved three times that they owned it, and even though AMZN didn't CLOSE above 85.96 - 86.0 DOUBLE RESISTANCE, the Bulls got through there intraday, so they are poised to do futher damage on the upside. We'll see what the Bears can do on defense today, but they'd better come out looking sharp. The Bulls would like to gap this thing up, to BID...ASK at something near/above yesterday's 86.60 high and make a play for 88.20, the top of the Bear Flag and the "W" pivot of a possible Double Bottom. Yeeeesh.
For the record, I wouldn't have bought The Bears any hamburgers or shakes after yesterday's game. LOL.
BUCY got a Conviction Buy out of Goldman before the open yesterday. The chart looked real decent, so I got interested in an Opening Gap play.
BUCY came out of the gate at 31.99, up $1.34 from Tuesday's close of 30.65, and up $0.57 above Tuesday's high of 31.42. 50% of that little gap was 30.705, so I put in an order at 30.75, a little above that. I've been getting shut out on a lot of those orders, but I was fortunate enough to catch this one. The early low on the session was 30.72, a penny and a half above the 50% retracement.
Fifteen minutes into the trade, I had a nice gain, so I cashed it in and planned to get back in on a pullback for a rally to the top of The Wedge, at 33.32. There wasn't any pullback. BUCY rallied directly to 33.32 and a little higher, and only pulled back to 32.82. It closed eight cents below the top of The Wedge, at 33.24.
Gain: just below $1,850.
6 comments:
I'm not sure I follow your feelings on AMZN. You had a profitable short trade and I think were looking to re-enter. The circumstances and action of the market changed your outlook. Were you still a little biased in your view on the action or is there a trade forming to the bullside that you are awaiting? I see a potential breakout bull trade and a potential bear failure. The market will tell us.
The BUCY trade was a dandy. Would you say that a news related gap fill trade is standard short term theme? I so, I like the concept.
Good Morning, Mark,
I didn't like the short side of AMZN after the SECOND retest of 85.96 - 86.00 on the jobs report, which is why I covered before the Bull Flag target of 82.60 got MADE.
After the bounce off the 82.45 low, I only would have been interested in the short side if the possible Double Bottom at 82.45 - 82.60 got taken out to the downside. As I said on Tuesday morning, I was suspicious of a Double Bottom.
I considered getting long the upside takeout of 85.96 - 86.00 resistance after the fed news yesterday afternoon, figuring that the Bulls have earned a trip toward 88.20 for at least a retest, but I'm not real crazy about the long side of AMZN either, particularly because of the Bearish Island Reversal.
AMZN currently is called Gap Up, at BID 86.55...ASK 86.74, straddling yesterday's 85.60 high. That kind of opening looked marked at yesterday's close, and is pretty much what I expected after the Bears let the Bulls through 85.96 - 86.00 resistance in yesterday's late going.
I'm not sure what you mean by "Would you say that a news related gap fill trade is standard short-term theme?" News-related gaps (up or down) often present short-term trading opportunities, but as always, much depends on what the chart looks like. If, for example, a stock is called Gap Up into resistance, that's more likely to be a "Gap And Crap" opening, and I wouldn't be interesting in buying a gap retracement. More likely, I'd be interested in shorting the Gap Up opening. I hope that answers your question.
Thanks for your input. What I meant about the Gap and Fill theme was just as you said: either buy the fill or short the gap depending on the charts. I should have described it as news related gaps as target rich environments for trading.
Mark,
Okay, I'm glad that I understood you.
The move in AMZN above 85.96 - 86.00 resistance now is looking to be a rather ugly Bull Trap, and it also looks like we've got Data Point #4 of a Symmetrical Triangle at yesterday's 86.60 high, with the Bear Flag nested within it. I'll put the chart up tomorrow morning.
I'm short again, at 84.55. If my analysis is wrong, I'll be giving back the $2,100 that I made on AMZN earlier in the week :(
Stop: Above yesterday's high of 86.60.
Melf,
nice work. Can you further elaborate on the bull trap idea. My thoughts were that when you have a defined resistance point that will serve a stop on one side and a buy point on the other, the market makers will rip through it temporarily to flush those positions prior to letting the market play out. The fact that it closed below the resistance yesterday, I would think would leave it valid.
Currently i see a double bottom near 84.05 on the 5 minute, as well as a symmetric triangle playing itself out as I write...
Hi, Kevin,
Yes, you have the right idea about The Bull Trap on the upside takeout of 85.96 - 86.00 resistance. Some bears covered, thinking it was bullish. Some bulls bought, thinking it was bullish. Both are trapped above 86.00, as it stands.
The fact that AMZN closed exactly at 85.96 really didn' tell us much. I've seen stocks close like that many, many times, right AT resistance, then they gap up like AMZN did this morning, and go higher. AMZN didn't, of course.
FWIW, I covered my short just before 3:00 PM. My entry wasn't that great and the market was holding up well, so I'm thinking that they might gun it to the upside into the close, as they've been doing. I'll look to re-enter short at a higher price, if I can.
The Double Bottom that you mentioned in the 5-minute is 84.07 and 84.07 exactly. They took it down to 84.16 this afternoon, but couldn't break it, which is another reason why I covered. I'll post the chart tomorrow morning.
Post a Comment