Alex,
Good question if you've looked at the chart, as you obviously did. I put my emphasis on the stochastics which were under 20 with definite turn up and a bullish crossover. The candlesticks gave very tentative support with a spinning top which suggested possible disipation of selling pressure...not a signal to trade on. But with CDG, and my backtesting, the best signal has been the stochastics (very short term--5 days); if I wait for volume or a strong candlestick formation it is late. On this one I also had and up turn in on balance volume which I look at. The biggest reason though is that when CDG gets under 20 (stochastics) it doesn't stay for long and after it crosses over it stays less time. That has been a very reliable indicator top and bottom (with some false break outs but very few).
My debrief is that two things that went wrong with this trade timing wise: 1) external factors, e.g., the barron's piece talking down the drillers might have been the catalyst, but more important, I think, is that it's clear now the drillers are being impacted by the big picture external factors that are affecting the overall market...otherwise we would have had a bounce back up today, in CDG, TBI, and DO for example (...DO especially had a nice hammer combined with a tweezers bottom formation, with a bullish stochastics reading); and 2) the intraday CDG action should have clued me in, with its sharp gap up at the open which quickly weakened and didn't hold.
What do you think?
Regards,
TomLF |
