Wednesday, October 31, 2007
Mastercard BREAKOUT, Intraday
Yesterday I put up two examples of a BREAKDOWN. Here's an example of a BREAKOUT!
Tuesday, October 30, 2007
BREAKOUTS / BREAKDOWNS - Layin' the SMACKDOWNS on some PROFITS
Ever heard of a breakout? No, it has nothing to do with acne, prison, or that awesome movie from 1995, Outbreak. In the trading world, a breakout is when a stock breaks above resistance and gets jacked up to new highs.
How about a breakdown? It's the exact opposite of a breakout - a stock falls below support and gets beaten down to new lows. They are the same, however, in that they each can make you some serious profits.
Breakouts / Breakdowns show up on all timeframes - weekly, daily, and even all the way down to one-minute charts. Here is what a breakout looks like:
And a breakdown:
As an example, I spotted this breakdown in AAPL today, on a 1-minute chart:
Another example, a breakdown in LDK Solar, 1-minute chart:
How about a breakdown? It's the exact opposite of a breakout - a stock falls below support and gets beaten down to new lows. They are the same, however, in that they each can make you some serious profits.
Breakouts / Breakdowns show up on all timeframes - weekly, daily, and even all the way down to one-minute charts. Here is what a breakout looks like:
And a breakdown:
As an example, I spotted this breakdown in AAPL today, on a 1-minute chart:
Another example, a breakdown in LDK Solar, 1-minute chart:
Friday, October 26, 2007
Making Money with POT
Potash Corporation of Saskatchewan, symbol POT, "is an integrated fertilizer and related industrial and feed products company" (Google Finance). The stock has more than doubled since January. Today it popped almost 5%.
At around 1PM a huge surge of volume came into the stock, sending it flying high. This was an excellent day trading opportunity. It broke through the highs of the day as the volume increased. If you had seen this developing, or had your trading software alert you of the movement, you would have made sweet profits. If you had bought 500 shares as the stock was making new highs at around $107, and sold near $113, you would have made about $3000.
This week I have noticed several setups exactly like this one. A stock breaks above consolidation on higher volume and surges higher. I think you could make good money day trading like this, especially if you have good trading software that will alert you when these opportunities arise.
Check out the 5 minute chart and the 1 minute chart of POT today:
At around 1PM a huge surge of volume came into the stock, sending it flying high. This was an excellent day trading opportunity. It broke through the highs of the day as the volume increased. If you had seen this developing, or had your trading software alert you of the movement, you would have made sweet profits. If you had bought 500 shares as the stock was making new highs at around $107, and sold near $113, you would have made about $3000.
This week I have noticed several setups exactly like this one. A stock breaks above consolidation on higher volume and surges higher. I think you could make good money day trading like this, especially if you have good trading software that will alert you when these opportunities arise.
Check out the 5 minute chart and the 1 minute chart of POT today:
Tuesday, October 23, 2007
Getting a Share of the Apple Pop
Apple, AAPL, was up about 7% today after they announced another tremendous quarter. AAPL has more than doubled this year.
Let's say you had decided to trade the earnings and purchased $5000 worth of AAPL yesterday. This would have been moderately risky considering the huge run that the stock has had. Today you would be sitting on a $350 profit.
Let's say you're a day trader and you didn't play the earnings. I spotted a great opportunity for day traders this morning. If you wanted a share of the AAPL pop, this was your chance. During the first 7 minutes of trading this morning, the stock sold off as everyone took profits. It sold off from roughly 189 to 184. Then you can see the stock begin to reverse on the chart. Two hammers (a candlestick pattern) formed as the selling subsided and buyers came in. This was a great entry point for day trades. If you had day traded with $50,000, you would have made roughly 1%, or $500. Check out the chart:
Let's say you had decided to trade the earnings and purchased $5000 worth of AAPL yesterday. This would have been moderately risky considering the huge run that the stock has had. Today you would be sitting on a $350 profit.
Let's say you're a day trader and you didn't play the earnings. I spotted a great opportunity for day traders this morning. If you wanted a share of the AAPL pop, this was your chance. During the first 7 minutes of trading this morning, the stock sold off as everyone took profits. It sold off from roughly 189 to 184. Then you can see the stock begin to reverse on the chart. Two hammers (a candlestick pattern) formed as the selling subsided and buyers came in. This was a great entry point for day trades. If you had day traded with $50,000, you would have made roughly 1%, or $500. Check out the chart:
Wednesday, October 17, 2007
Volume is Critical for Day Trading
I'm no expert day trader, nor do I have much/any experience day trading; however, I have been watching the daily price action in LDK Solar, symbol LDK (I sound like the Holiday Inn Express commercial). First off, check out the huge surge in volume the stock has seen in the last 2 weeks.
Like I said, I've been watching the daily price movements in the stock - and I've seen a lot of good opportunities for day trades. Today, however, I noticed something different. The volume dried up. The 1-minute candle chart was no longer revealing these day trade opportunities due to the lack of volume. If you look at the 1 minute candle chart below you'll see what I mean. In the middle of the day volume was very low, and the candles look like scrambled mess. In the afternoon, however, volume picked back up and the candles began to look organized. Organized enough to give good signals for trade entry/exit.
The moral of the story: One day a stock may have high volume/liquidity and be a great candidate for day trades. The next day that same stock might see decreased volume and you might as well be trading it blindfolded.
Like I said, I've been watching the daily price movements in the stock - and I've seen a lot of good opportunities for day trades. Today, however, I noticed something different. The volume dried up. The 1-minute candle chart was no longer revealing these day trade opportunities due to the lack of volume. If you look at the 1 minute candle chart below you'll see what I mean. In the middle of the day volume was very low, and the candles look like scrambled mess. In the afternoon, however, volume picked back up and the candles began to look organized. Organized enough to give good signals for trade entry/exit.
The moral of the story: One day a stock may have high volume/liquidity and be a great candidate for day trades. The next day that same stock might see decreased volume and you might as well be trading it blindfolded.
Thursday, October 4, 2007
$200 in 15 Minutes: Combining Candlesticks, Trendlines, and Support/Resistance for a Successfull Day Trade
At around 2PM today I checked an intraday, 1 minute chart of RIO. I saw a nice short trade setup developing. I said to myself "If I weren't working right now, I would short 1000 shares at $32.10." I checked back every few minutes, monitoring my hypothetical trade. After about 15 minutes the stock dropped to as low as $31.77, at which point I said to myself, "If I had actually placed this fairytale trade, I would cover right now." Depending on the order execution, this trade would have been worth between $200 and $300. Not too bad for 15 minutes in the market.
I used candlestick formations, trendlines, and support/resistance to determine my entry and exit points. I also used multiple timeframes - a 1 minute chart to spot the setup, and a 5 minute chart to eliminate some of the "noise" and take a step back to see the bigger picture. It's quite amazing that the same methods of technical analysis work for both 1 minute charts and daily charts.
Check out the 1 minute chart:
And the 5 minute chart:
I used candlestick formations, trendlines, and support/resistance to determine my entry and exit points. I also used multiple timeframes - a 1 minute chart to spot the setup, and a 5 minute chart to eliminate some of the "noise" and take a step back to see the bigger picture. It's quite amazing that the same methods of technical analysis work for both 1 minute charts and daily charts.
Check out the 1 minute chart:
And the 5 minute chart:
Monday, October 1, 2007
DOW Market Carpet
After the market close on Tuesday, September 18th, the day the FED cut rates, I said the Dow Jones Industrial average would "blow by its previous record of 14,000 in the next few weeks." Today that happened, 10 trading days later. The DJIA closed today at 14087, 2.5% higher than the close on the 18th.
Big whoop - I called a 2.5% move. The problem is, I didn't put my money where my mouth was. I should have gotten long the Dow. How does one get long the Dow? - Diamonds! That's right, buy Diamonds!
Diamonds is actually an ETF that tracks the performance of the DJIA, symbol DIA. My exclamation to "buy Diamonds!" was merely an attempt to engage my female audience (namely my girlfriend, the only person who reads this blog).
Getting to my point, I could have bought some DIA and captured the upside I predicted in the Dow.
Better yet, I could have picked a few of the best stocks within the DJIA and bought those. The market carpet below, courtesy of StockCharts.com, shows the top 5 and bottom 5 performers since the close on the day of the FED rate cut. The top performers, Boeing, Alcoa, Honeywell, United Technologies, and Verizon, were all strong names at the time and would have been easy picks. The bottom 5 performers, Home Depot, JP Morgan Chase, Citigroup, American Express, and Wal-Suck, were all stinkers at the time and would have been obvious stocks to avoid.
Big whoop - I called a 2.5% move. The problem is, I didn't put my money where my mouth was. I should have gotten long the Dow. How does one get long the Dow? - Diamonds! That's right, buy Diamonds!
Diamonds is actually an ETF that tracks the performance of the DJIA, symbol DIA. My exclamation to "buy Diamonds!" was merely an attempt to engage my female audience (namely my girlfriend, the only person who reads this blog).
Getting to my point, I could have bought some DIA and captured the upside I predicted in the Dow.
Better yet, I could have picked a few of the best stocks within the DJIA and bought those. The market carpet below, courtesy of StockCharts.com, shows the top 5 and bottom 5 performers since the close on the day of the FED rate cut. The top performers, Boeing, Alcoa, Honeywell, United Technologies, and Verizon, were all strong names at the time and would have been easy picks. The bottom 5 performers, Home Depot, JP Morgan Chase, Citigroup, American Express, and Wal-Suck, were all stinkers at the time and would have been obvious stocks to avoid.
Damn You Nokia!
Navteq Deal Guts Garmin | TheStreet.com
I bought 30 shares of Garmin (GRMN) on August 16th at $88.82. Last Friday GRMN closed at $119.40 and I was sitting on a 34% profit. Oink Oink.
I bought 30 shares of Garmin (GRMN) on August 16th at $88.82. Last Friday GRMN closed at $119.40 and I was sitting on a 34% profit. Oink Oink.
I got a rude awakening this morning when I saw the stock trading near $102, down almost 15%! Nokia bought Navteq, Garmin’s map data supplier, for about 8 billion dollars and some change. The stock also got downgraded by CIBC this morning. Luckily, GRMN found support at its 50-day moving average about a half hour into trading this morning. It is currently bouncing some, trading near $108, but the 20-day MA seems to be acting as resistance. It will be interesting to see where GRMN closes today.
When I first witnessed the carnage this morning, I was in panic mode and almost sold at $103. Luckily I kept my wits – It would have been a better idea to buy at $103, as you would now be up about 5%. I’m going to see how the stock performs going into the close today before I decide what to do.
This news raises some questions: can Garmin maintain its growth in the personal navigation device market with this increasing competition? Is the stock getting ahead of itself (up 92% this year)? Will GPS capable cell phones begin to take market share from Garmin? Apple could release a GPS device, or add GPS to the iPhone. Check out the article below by Marshall Brain.
Apple about to blow us away with a palmtop? | Marshall Brain
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