Day Trades - TCK, CLF, TBL

Bear flags have been hit and miss in this market. Mostly they've been fake outs. So why was TCK a good short? From the daily chart above, we noted a huge volume spike on the Feb. 9th drubbing. So we see a huge red stick with volume, plus bear flag with NRIB observing the downsloping 5 ema as resistance closing at the base of support. This bear flag felt like it could work.

Small size on break of $58.00 and added at the first consolidation BO. Took a partial after 3 consecutive WRBs on 15 min. timeframe (not depicted). Got stopped on balance as price capitulated into $56.00 and bounced.

CLF gapped up on earnings. Price chopped around in the first hour and then started basing in an increasingly narrow range, forming a flat base at $99.50, and setting up a gap fade.

Price breaks down, retests the base and runs lower for 3 consecutive 15 minute bars. Take a partial as price approaches $98.00. CLF snapped back sharply. I thought the second half was going to get stopped out at BE, but, it came back down and I was able to salvage a decent profit on the second half.

Looking back at the 15 minute chart, there just wasn't enough volume expansion on the initial leg lower to expect continuation.

TBL was another earnings gap from the Trade-Ideas scanner - gap up min. $1.00, RSI on 15 minute timeframe minimum 60.

TBL gapped and ripped then spent most of the rest of the session in a tight narrow range. Normally, I like to buy the BO of the upper range, but time was of the essence, so I decided to buy the bounce off of the bottom of the range, then if the BO failed, I would have some profit from the trade. Turned out to be a good strategy as price/volume expanded into the close. The base BO also set up perfectly with a low risk NRB on the 15 min. timeframe.

Entry and exits depicted on 1 minute chart below.

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.

Technical Picture - Profit Taking at Resistance

Markets gapped up and rallied to the 200 SMA and full retracement of last week's slide. As soon as that widely watched tag occurred, price started to retreat as market participants booked profits. Selling was slow and choppy until Moody's downgraded Greece debt, resulting in an inverted hammer/ bearish shooting star daily candlestick pattern. Overnight, S&P futures retraced 62% of the PDR (previous day's range), currently trading in the ambush zone.

INFY from the Trade-Ideas scanner, gapped and rallied above the daily pivot R2 (blue dotted line). Price consolidated the gap in an orderly fashion. Enter long with target of weekly R2 which matches nicely with full Fib extension.

NTAP - Target 2nd half of full extension of Friday's pattern.

It was important to book full profits before the S&P tagged the 200 SMA because a sell-off was likely. I took half off my POT swing trade on the open. Still holding full NTAP swing trade in the hope that the market does not retest last week's lows.

Can't Keep a Good Scan Down

I get an extra boost of confidence when a stock that I have recently read about (from technical trading blogs that I follow) hits my RT scanners. Often these stocks are already on my watchlist. Such was the case today with RIMM (Jamie's post here last night) and AU (HCPG blog a couple of days ago). The fact that the stock is being noticed/discussed elsewhere implies move potential in either direction - I simply go with the NOW moment flow.

Also from the scanner, UNP had a very nice gap up and consolidation setup. The snapshot below captures some key scanner hits today and 15min charts for RIMM & UNP with the associated NR7 bars highlighted. I just love it when a scan, I mean plan, comes together.

Failure of Daily Setup - AGU

AGU has been on my WL since I traded the BO trend day a few days ago (from scanners). Coming into today it appeared to have a daily long setup on/at support. It gapped down (profit warning) and formed a bearish intraday pattern right at the daily support level. Typically the failure of a setup leads to a significant move in the opposite direction.

Positive Earnings

Based on positive earnings news from companies reporting yesterday and today (INTC, CSX, JPM, ABT, etc.), the market appears to be anticipating more positive earnings going forward. I followed the trend and focused on the top %changers from my core WL. FWLT gapped up, attempted to fill the gap, and then formed a small C&H. The C&H pattern is clearer on a 5min timeframe. I managed the trade and exits - partial at test of previous PP and remainder near EOD - as shown on the 15min chart below.

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.

H&S and Gap - RIMM

Over the weekend, Jamie mentioned a potential H&S top in POT. RIMM had a similar setup on the 15min chart and setup beautifully today with a gap down on heavy volume, followed by a consolidation on declining volume. The entry was a NRIB near the 5ema on the 15min chart.

The following chart is in response to a question by Day Tradr. Key features are shown for the last couple of days - none of these trades were taken. There was a clean 3 PP entry on Friday. Today there was loose base that led to a retest of the OR and $20 level. A small consolidation (low ADX, left shoulder) setup the retest of the OR and then turned into a small intraday H&S formation. Notice the matching consolidation (low ADX, right shoulder).

Mail Bag - Gap Scan

Hi J

I noticed on your newsletter you said ANF from the gapper scan, are you referring to the Trade Ideas Scanner? If so, can you tell me which scan parameters work best?

Again thanks for your help.

Hi E,

Yes, I'm referring to the Trade-Ideas scanner. Basically, I started off with the TI pre-configured scan entitled "Stocks down big in pre-market" and I adapted to my personal needs. In the window specific filters I set a min . price of $6.00; min. daily volume of 200,000 shares/day; with a max up from the close of -5%. In the symbol lists, I exclude all ETFs, Holders, Ishares and special symbols.

In summary, I'm looking for a wide gap from previous day close, like an earnings gap or story stock. The settings I'm using limit the number of hits to a manageable level, and eliminates all those ETFs. When trading gaps, you want to focus on the momentum plays, which mostly involve individual stocks. Measure quality by number of days and check the daily for a good idea of support/resistance levels. In the case of ANF, although the number of days was few, the daily chart was setting up for a bearish island reversal because the gap was wide.

Trading in Slow Motion

ANF from the gapper scan. Ambush on the first retracement and MA convergence on the second. It's very important that the second retracement be shallower than the first.

POT carved out a huge cup and handle, but the target was a gap fill. Normally, we expect a C&H pattern to deliver a 100% extension, but not if breaks out in slow motion with only a slight uptick in volume. I shorted the lower high after the gap fill, for a small move into the close.

TI Gapper Scan - ATI Mirroring VIX

ATI (lower 15min chart) hit one of my TI gapper scans today. Mid-day I noticed that the pattern in ATI was mirroring VIX (top 15min chart). The VIX tends to move inverse to the broad market (VIX moving up means market probably moving down). The main reason I like the VIX is because it usually has less noise - compare it to SPY, QQQQ, etc. Therefore, the turns and flags are more obvious (to me anyway). The action in ATI alone was compelling. Combined with the pattern in the VIX my confidence level was up two notches. Notice that the trendline breach and flag in VIX lines up perfectly with the respective features in SPY from Jamie's post below.

Gap - MDVN, Gap Fade - ATHN, Ambush - SPY

MDVN, from the TI scanner, gapped up in late pre-market. The opening range leaves a long upper shadow, but clears daily resistance (blue line) on a closing basis. The next two bars are NRIBs in close proximity to rising 5 period EMA. This setup is very similar to the GIL trade earlier this week. Burn it to memory for future reference.

It's always a good idea to map out daily support/resistance of gapper candidates in pre-market and/or first 15-30 minutes of trading session. That's why I like the TI scanner - it tells me how many days of S/R are being taken out in pre-market price action.

ATHN, also from the TI scanner, had two support levels at $29 and $28. Buyers stepped in at $29. The opening range was solidly bullish and I waited for a break of ORH. It's important to watch carefully, for a close above the downsloping 5 period EMA just above the BO point.


SPY setup a perfect ambush trade. Took a partial as price approached the downsloping 50 SMA and exit balance on weakness following lower high. Price eventually retested sessions highs, but failed to close above, so I waited for confirmation and shorted the failure.

Combo Confidence - SRS

The gap down open and overall weakness in the broad market produces gap ups in several inverse ETFs on my WL. I noticed the perfect combo for trading SRS (inverse Real Estate ETF). Early in the session, SRS was the %change leader on my WL and VNO (Vornado Realty Trust) was near the bottom based on %change. Additionally, with SRS trading at/above the PDH, the daily chart (left) looked great.

My first entry was a strong full b0died candle closing above the 50% Fib level of the 30min OR. I was stopped out following consolidation at the ORH. The long upper tail on the first 15min bar was not easy to overcome. Two bar later the ORH was decisively taken out with another strong full-bodied candle. After some chop, the traded carried to the 62% extension of the 30min OR. The second trade never violated the ORH.

Tough Week - Chop and GOLD

Summary of last week's action: Following the gap-down trend-day down on Monday, Tuesday was an offsetting trend-day up with strong volume in the financials. After that bang-bang volatility, the market went into chop mode for the rest of the week. The 30min S&P chart below highlights the choppiness Wed-Fri. A close in the vicinity of the open usually has chop in between.


I had several scratches and stop outs that alerted me to the chop mode. I had decent long trade in GOLD on Friday. It hit my gap + volume scanner and was very strong relative strength-wise compared to most other gold stocks. Gold (in general) was moving up due to weakness in the US dollar. I will elaborate more in a Technical Picture post.

Opportunities Every Day - SNDA

Beware of the negative psychology trap. Great traders (like Jamie and Trader-X) demonstrate that there are good opportunities everyday - you just have to remain focused and find a few of them (at least one).

What are the most common reasons that traders can not find a good setup: 1) they are already in a weak/mediocre trade, 2) they are not clear/certain about what distinguishes a GOOD/GREAT setup, 3) they don't have the tools (resources, scanners, etc.) to locate good setups from all the noise, 4) they don't have the patience to wait for a good setup.

The screen shot below includes a snippet of my long scanner from this morning. Of the 10 or so stocks that were hitting the scanner (tends to repeat every 10 mins), several produced good setups sometime during the day.

SNDA was hitting the scanner all morning and eventually setup a nice range contraction at the 38% retracement of the AM range.

Best Setup of the Week (Perhaps) - WYNN

WYNN had a strong 3-4 day upside move on the daily. Yesterday was a gap up that formed a shooting star on big volume. A red candle today could confirm the shooting star and potentially form an evening star on a weak close. What happened? A gap down open that had the potential to leave a 1-day island reversal. Here is the daily chart.


How to trade the gap down? Draw Fib line across the opening range (OR) and read price action in the congestion zone (38-62% Fib levels). Bars 3 and 4 (15min) were narrow range with bar 4 closing weak and just below the congestion zone. The entry was a breakout of bar 4. The 62% extension of the OR is a good profit target (normally). Since the 62% target was achieved so quickly, perhaps I should have targeted 3 WR 15min bars for my first exit. WYNN setup a second entry 'beyond the extension' for a continuation move. In fact, it closed near the low of the day.


Had I set my Fib lines from the PDH to the ORL (classical method), here is where a 62% extension target would have triggered.

Tracking Big Gappers - RIMM

Trader Jamie advocates populating his WL with stocks that have recently experienced a large, high volume gap. Besides being a WL regular, RIMM experienced a big upside gap last Friday after beating estimates. The daily chart is shown below.


On Friday, RIMM was in consolidation mode. Today, the opening range (30min) action demonstrated that RIMM was in a range expansion mode (wide range, full bodied, green candles). Following a breakout of the OR, the 15min chart setup a low risk entry following a doji candle at the ORH. The target was a 62% extension of the OR.

Single Focus - RIMM

Coming into today (Friday), I knew that RIMM had beat estimates and was going to open with a big gap up. Sometimes I choose to focus all of my attention on a single stock if: a) I have limited time due to work, and b) I know that one of my watchlist favorites (such as RIMM) is going to gap big and probably trade huge volume.

Below is a 10min chart of RIMM. The first candle was a doji with long lower wick. The second bar was bearish and closed below the 50% level of the OR. The third 10min candle closed just below the 62% retracement zone and was the narrowest range of the morning. That was the trigger bar.


I could (and should) kick myself because it traded exactly (to the penny) to the 61.8% downside extension of the OR. I was EXPECTING more range and missed the exit. The stop out resulted in less than half of what the target would have generated. Afterwards, I could tell that the indices were in consolidation mode and RIMM was acting similarly. Overall, a fairly choppy Friday.

Path of Least Resistance - Up

With the gap up in the indices on Thursday, longs setups were abundant from both my WL and from gapper scans. Here are a couple of gappers that were also on my WL. Initial setups in both were based on Fib levels drawn with respect to the 30min OR. Both were closed at the 62% extension of the OR.



RIMM (above) beat estimates after the close and was trading up $11+ at $60-61. I always feel cheated when I daytrade a stock (long in this case) and it jumps big after the close. Oh well, I got a piece of the action with small risk.