Monday, December 20, 2010

Doji day in the indices but huge day for momentum stocks

Today was an interesting day, with not much underlying strength in the indices (the S&P500 is up a mere 0.25% for example), but several momentum stocks had huge breakouts today. ARNA comes to mind, with a 45% run!

I had a pretty good day overall, but I had one bad trade which I'm a bit upset about. The trade is described below in the chart, and as a brief explanation, I had bought ATPG on December 16th when it seemed to bounce on the 50day moving average. My plan was to hold until I got stopped out, or until the stock broke out of the wedge. My mistake was placing the stop too tight, at a totally random spot of 14.89, even though I knew it would probably stay within the boundaries of that wedge, as it had done many times before. I should have placed by stop just below the rising trendline, and I would have been fine. I have no doubts that ATPG will retest the upper trendline in a few days. In fact, ATPG is a great technical stock, as it follows patterns very nicely.

Other than ATPG, I took profits in EXXI, ESI, RDWR, VVUS, TPCG, IGOI and BZH. I had one loss in ATPG, and a tiny loss in SFD. I don't have time to post all the charts today, but here's the chart for BZH which was a nice play today. I got in at 4.97, scaled out at 5.12 and 5.18 and I'm still holding 1/4 size.


And here's the 1-min chart:

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