Yeah, saw that with F....
A classic reversal, but the 20 sma looks like a good place to lie in wait for the next round, and short F when it fails at the 40 ema on the 10 min intraday:
stockcharts.com[h,a]daclyyay[dc][pb20!b200][vc60][iLh14,3]&pref=G
139.142.147.22
A short entry at the 20 sma on the daily chart looks like it will coincide fairly closely with the bottom of the recent gap down, also.
But remember, there's a lot of shorts already in F, so there's always a risk of a short squeeze there moving things against you in a hurry. For that reason, it is helpful to watch how F trades as it approaches the 20 sma, and watch what happens on the time and sales as it trades at levels where the short stops might be expected to be lying, e.g. $10.00 and $10.50. If you see evidence of massive buying at the ask, that suggests the stops are getting triggered en masse.
Your friend made a big mistake with F IMHO, especially considering the short interest there. You just knew the shorts were gonna take profits soon, and send that thing northward tripping short stops all along the way like firecrackers and just adding momentum. The general market rally was the catalyst there, and the shorts knew holding further was just tempting fate.
The idea there is to enter a short as it weakens after rallying into resistance, not short it when it is extremely oversold and has been pounded down so low it has to have an umbrella just so the ants don't pee all over it.
RE BOOM...
It sure did! (*BOOM!*, that is)
Looks like there's a good chance it will fly on through the middle of the BBs and test previous chart resistance, possibly even the top rail of the BBs.
stockcharts.com[h,a]daclyyay[dc][pd20,2!b200][vc60][iLh14,3]&pref=G
You have a pretty nice profit there of 8 or 9%. If I were trading BOOM from $26.42, I'd book partial profits right here (at least a third of the position, and probably half of it) and move the stop up to no lower than $26.97, which is just under the 40 ema on the 10 minute chart:
139.142.147.22
That stop is not so close you are likely to get whipsawed on intraday volatility, but is greater than breakeven on the rest of the position, meaning only a big gap down could stop you from making about 5% or so overall on the trade, and yet you are still letting a winner run if it can and if it will.
....all IMHO, of course.
T |
