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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: Vendit™ who wrote (4605)	2/4/2005 7:40:15 AM
From: Walkingshadow	Respond to of 8752

Hi Reid, I didn't mention this, but when I short something, generally one of the prerequisites for an entry is that the stock must fail intraday support, AND confirm that failure with a lower low on an intraday basis. The intraday support I like to use is the 200 min moving average with a 1 min chart setting, but other definitions of intraday support could be used. 139.142.147.22 You can see that LMIA does not yet meet my criteria for entry, and so falls under the category of wait and watch. A gap down at the open would probably mean intraday support is broken. In addition, I usually require that the stock trade below the previous day's low. Now, with LMIA, that is a pretty severe criteria. The stochastic setting on the daily chart we have been looking at is a fast one (5-3-3). 139.142.147.218 Things looks considerably different with a slower stochastic: 139.142.147.218 So it would be wise to wait until LMIA not only breaks intraday support, but shows downward momentum as well. Even better would be if it trades below yesterday's low, but then the profit potential is significantly curtailed, and the risk/reward profile becomes less attractive since the lower BB rail and chart support would not be far below, and these are likely exits on the trade. In a situation like this, I would probably also take volume patterns into account. If I saw a surge of volume at an intraday peak then sudden disappearance of volume, that would push towards a short entry. If I saw a similar surge of volume as LMIA traded down, I would hold off, since reversal to the upside would be likely. This sort of strategy doesn't work very well unless the average daily volume is high (well over 1 million shares, the more the better). T

To: Vendit™ who wrote (4605)	2/4/2005 8:11:10 AM
From: Walkingshadow	Read Replies (1) \| Respond to of 8752

This one will be interesting to watch. I am not going to short LMIA because I am already short the market, and I prefer to short stocks that have heavier daily volume so I can get clues from the volume patterns and stochastic. Thinking about it, I would use the intraday support criteria only as an entry signal (rather than requiring that it trade below the previous day low). The initial stop would be if LMIA rallies above the intraday support, then subsequently confirms that with a higher peak and preferably also a higher low. Profit targets would be the 20 ema ($4.73), then chart support at $4.25, then the lower BB rail at $3.87. So I would plan to take partial profits at each of these points, probably with a final exit at $3.87, unless I saw signs of buying pressure building. If the first profit target is hit, initial stop should be moved to no worse than break-even (or 4% away, whichever is closest). If the second profit target is hit, the stop should be adjusted to no worse than 4% away. Let's see how this one works out. T