Ags Breakout - Potash Corp./Saskatchewan (USA) (Public, NYSE:POT)

MOO broke out of a two month base yesterday led by POT (second largest component of MOO, next to DE).

As discussed in my previous post, POT had carved out a multi-mth base and was setting up for BO. Unfortunately, I wasn't expecting it to move so quickly. But in reviewing the chart now, I see that the price/volume contraction on Monday and Tuesday foreshadowed an imminent BO.

Based on the size and quality of the base and weekly resistance, I am targeting $180 near-term for POT.

My initial entry and partial ($150 round number) were executed from my TWS iphone app using an area chart. I wish I had been home for this. Was relieved to get home in early afternoon to see a real chart.

This chart is one of the most perfectly orderly charts in my recent trading memory. Note that POT never made a lower low after the initial entry, until it failed to print red price bars on a new high shortly before my exit. Anyone trying to short, prior to that level was hurting pretty bad.

POT formed two ascending triangles on the way up, allowing participants who missed the initial BO, to jump in. Burn this chart to memory, it's a perfect example of momo in action.

CNBC Million Dollar Portfolio Challenge contestant beats 254,000 other stock traders and wins $500,000! Now you can literally copy his exact trades and safely make money month after month. Easily double your money! Stunning 92.4% accuracy. Click Here!

Day Trades from Watchlist - SNDK EXPD

I highlighted the SNDK and EXPD setups in Sunday's post. For SNDK, both of the targeted levels were attained in very short order.

I didn't trade SNDK on Monday or Tuesday because of the large gap. Finally, yesterday I decided to enter on the break of the ORH, otherwise I was going to miss the entire move altogether. As depicted on the 5 minute chart below, SNDK gapped open and held the PDH as support. Enter long on break of ORH. Exit half when the $45.00 target is reached. SNDK consolidated briefly and ripped another half point. The long upper shadow as SNDK tags $45.60 and pulls back, signals the end of the move.

EXPD gapped and sprinted to daily baseline in the OR, signaling that it was finally ready to BO of the daily base. Enter long as price breaks $52.00. I was targeting $53.50 based on long term resistance, but is stalled about 10 cents shy and it was time to get out as the move was very extended.

Add BIDU to the WL. As you can see from the daily chart below, we have a base forming at $109.50. Yesterday's bar is NR7 (price/volume contraction ahead of expansion). Since testing support last week, we have carved out a higher low and BIDU is forming a mini ascending triangle base. Target is daily resistance at $115.00.

The 15 minute chart shows how clean the underlying base is.

Technical Picture - Follow Through and Base Break-Out

Yesterday stocks held resistance at their 200 SMA, but today's strong start led to a broad based rally with all major sectors participating, climbing past the key technicals to settle at a three week high. Euro strength was the primary catalyst.

FSLR gap and go, followed by a shallow retracement. Wait till it signals it wants to go higher. Partial 50% extension.

CELG bullish flag. Partial at 50% Fib. extension. Stopped out on balance.

INFY (gapper from yesterday) briefly took out ORH, then formed a handle to go long.

Breakout Comparison - ARO vs CRM

To help determine the probability of BO follow through, focus on these two key areas: 1) daily chart setup, and 2) intra-day price action around the opening range or BO.

Here are key comparisons between ARO and CRM on 6/3/2010:
From the daily charts below, both had notable daily patterns with BOs on 6/3. ARO had pulled back to form a symmetric triangle, but it was below key price pivots and below its declining 50 day MA. The CRM setup was much better technically. CRM formed a B&B above its upsloping 50 day MA. In general, a flat-top B&B in a strong uptrend is more powerful than a symmetric triangle below recent price highs. From a daily comparison, CRM carries the higher probability of follow through.


On the 15min charts below, I marked several features: 1) range/volatility of the 15min OR bars, 2) proximity of the first pullback to the 15min 5EMA, and 3) proximity of the BO level to the 5EMA. While both gapped up on the open and both had upper wicks on the OR bar, ARO was much more volatile and moved "too far too fast". CRM moved up and had an orderly pullback to the 5EMA while ARO remainded well above the 5EMA. The BO level in ARO was well extended and above "loose" price action. The BO level in CRM was much closer to the 5EMA and associated with "tight" price action. From an intraday perspective, CRM gets the nod. The result was that CRM trended up all day while ARO spent the remainder of the day consolidating the volatile OR action.

Good Daily Charts to Study

Jamie mentioned POT (top chart) in his Technical Picture post last night. It broke through resistance right on que today. AGU (bottom chart) is in the same industry group - agricultural chemicals - and also broke out with a trend day. Compare and contrast the two charts. Both were excellent daytrading opportunities today.

Edit: Note that POT reports on Thursday.

Gapper - Teck Resources Limited (USA) (Public, NYSE:TCK)

Last night I mentioned in the comments of the previous post, that TCK was a focus list long. As you can see from the daily timeframe above, it had carved out a solid base. Yesterday's NRB was the perfect pause before expansion. This is a high volume BO and I'm holding for a swing in my retirement account. The day trade in my trading account is outlined below.

This morning TCK gapped up with bullish opening range. Price retraced to the 5 ema on declining volume. Enter on break of ORH. Take a partial after 3WRBs as price approaches whole $ level. Exit balance as price approaches full extension.

Breakout - Potash Corp./Saskatchewan (USA) (Public, NYSE:POT)

Last night we said that POT was coiling and looked ripe for a BO either up or down. The red lines indicate the pre-market high/lows. The pre-market gives a pretty clear signal that price wants to break to the upside.

In order to trade the BO, we move to the lowest timeframe. On the 1 minute chart below, we see that price gaps and pulls back on lower volume, candles form lower shadows and we pull the trigger as price approaches the BO base at $97.00. If price stalls at the pre-market high, we'll exit. That doesn't happen so we hold on until price breaches consolidation lows, where we lock some in. Price retraces and eventually comes back down close to BO point. Once it rallies back up to base, we add back to our position at the same price we partialed out.

Price makes new high and continues above whole $ level - $100. After it prints a lower high, we tighten stop.


GRMN - B&B back up to ORH.

Stocks to watch tomorrow - CNQ - 2 inside days. Gold stocks - waiting for range BO - Canada said it will takes measures to curb $CAD strength as the higher dollar will hinder economic recovery. Also continue to watch $USD and reaction to rate decisions overseas - Euro and British pound.