Steve Jobs is going to live. Hence AAPL gapedup with a fairly neutral green bar (almost equal shadows on top and bottom), pulled back, and then printed a textbook hammer off the 5 MA. I entered on the break of that bar’s high. It stalled along the ORH, and I almost bailed, but stuck with it. Trader X talked about watching the midway point between the ORH and the Fib extension to see if price stalls. The 20th bar popped up towards the midpoint, but pulled back, alerting me to watch closer. The next bar was red and weak, and although it still closed above the 5 MA, I felt AAPL had made it’s run, and I exited.
FCX has always been a tough stock for me to trade. It had a small gap down at the open, but could not close below the consolidation range from the previous day. The third bar was a a strong green bar that finished above the ORH and the consolidation range. That bar went a long way very quickly, and left a small upper shadow, so I was not comfortable entering on the break of its high. I wanted to see a consolidation bar form first. The next bar was not quite what I wanted for an ideal entry, but it was a hammer type of bar, and I entered on the break of its high. Price climbed and continued to close above the 5 MA. The 19th bar could not continue the move. It began to look a little toppy, so I closed the position.
LEAP was painful. I entered on the break of the third bar high, in the same set up as in AAPL above. However LEAP meandered and could not seem to break it’s ORH. After attempting the break on the 15th bar, but failing on the 16th bar, I moved my stop up. It got hit on the next bar. In retrospect, this was a stupid move, as I only had a small profit, and already had my stop in at break even. I should have given it more room, and left my stop in place. Of course, as soon as it hit my stop, it ran up past the ORH for another 70 cents. I think I just wanted to “beat” the stock and get out with a profit, even a tiny one, which I did. But that is not the type of non-emotional thinking that is needed for a successful trade, and I lost out because of it. Lesson learned (I hope).
