Wednesday, January 12, 2011

Morning gaps

So I wanted to go over a strategy that I often try in the morning on stocks that are gapping up. It doesn't alway work out, but sometimes you can make your day in one trade! This morning, I noticed APWR was gapping up around 5% in premarket on good volume, above a recent consolidation and into a nice gap from November 30th. It announced a 43$ million contract with another company, and I thought this was likely significant enough to sustain the gap.  My target was the top of that gap, at around 6.30-6.35. Unfortunately, I got in prematurely, and got shaken out.... This often happens to me, and I need to find a way around this! Anyway, here are the daily and the 1-min intraday charts, let me know if you have any comments! Thanks!



Otherwise, I had a decent day and played the PWAV breakout along with many people in the Charts Gone Wild chatroom! We banked some good coin on that one!
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3 comments:

  1. RickHJanuary 13, 2011 at 9:45 AM

    great trading cath!

    on apwr, what do you think about applying your selling strategy to your stop losses? (you know how exponentially more resistant stocks get around support/resistance and round numbers, and you use that in your selling). So what about having had the apwr stop at .99 rather than .01? in retrospect it would have worked, course everything works then :) still, would have only been additional .02 risk but would have still prevented further losses on a total meltdown? killer on the pwav! cheers, rick

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  2. CathJanuary 13, 2011 at 9:58 AM

    Hey Rick,

    Thanks for the comment and the suggestion on APWR. Yes, you're absolutely right about the stop placement! In fact, I normally never put my stops at round numbers, and I know that X.9X is often support, just under round numbers. So 5.99 or 5.97 or something like that would have been a much better stop placement! I'll try to be more mindful of that in the future!

    Thanks, really appreciate your input!

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  3. RickHJanuary 13, 2011 at 10:35 AM

    well, not sure if it was input or more question, but stop loss placement on entry is the part of trading i think about the most, so am glad you posted something on this. personally, i like the .09 stop the best, and not .10 below, fwiw

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