I tried 2 scalps today, one off WB and one off AMR. The WB one was messed up from the start- I had to use a 1 minute candle because the Scottrade chart was messed up and I only clipped it for .11. I bailed when it failed to cross 3 only to see it take off later. Instead of chasing it I moved on. People are getting burned by banks left and right. However AMR looked like the perfect reversal set up- I posted about that here and here. However I've been a little shy about playing these ever since I was so horrible at predicting the ABK bounce on the day it got crushed 80%. However AMR looked very good for several reasons. First, It was crossing back over 9 which gives it some new lift. But most importantly its cross over 9 represented its ADR support which I posted about here. With a high of 10.30 and low of 8.81 it had used up about 15% of its day range [10.30-8.81=1.49/10.16=15%] which is where this stock has been ranging (ADR5 ~ 12%; however it has had recent days of 15/16%). So the 9 cross looked really good. I also mention in one of those previous posts that this reversal pattern seems to hold up better in stocks over $7. Soon after it looked like I was wrong yet again- but no reason to sell unless it make new low below 8.81. Luckily the ADR support held and it took off. All I wanted was 9.30 but took it to 9.50's. Went to almost 10. Good play.
(Sep 30-11:07) johnnyvento: trying AMR off 9 bounce
Still in SIL, will probably close tomorrow, up over 3k
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8 comments:
ADR support and resistance is a very important factor to consider, it's true it's not mentioned as much, glad you mention it. Just by eyeballing a chart you can get good indicators on the probable price extremes of a given day, especially with clean charts.
never seen anyone talk about support and resistance as something other than fixed price points... and changing everyday based on ADR.. have you come across that before
I thought about playing TMA overnight when you mentioned it's tendency to gap up in chat. But I chickened out as I didn't have any day trades and was too scared to hold a financial-related stock overnight in case things went bad in after-hours like they did to me with FNM.
Too bad I didn't...TMA was at $2.20 after hours! If I had bought before the close I would've been in at around $1.75.
yes I was contemplating that exact trade myself.. I didn't bite either
No Johnny, I haven't seen it thought out like you did in this post, I just know that I've used the concept without thinking about it really or labeling it.
I remember on my DYN short whenever that was...a week ago maybe...since the chart was so clean I could see that it was approaching what seemed to be an area where it would bounce back, and I wasn't thinking this in so many words, but basically, yeah, it was approaching its dayrange limit. I definitely didn't calculate it, it was more a visual thing with the charts, so I guessed to get out at 2.90...turned out 2.85 was the low on the day, so in that case ADR support held true.
Maybe it works just as well on messy charts, I just know for me personally on those I never know what's going to happen, but with clean ones there are consistencies for sure. Airlines are a great example in my opinion, I follow UAUA and LCC everyday, they typically have clear boundaries. When UAUA crashed that one day I remember saying "UAUA cliff" in the chat just cause it was so far out of its range so quickly, it seemed like there might have been an exception to the rule developing.
I guess basically when a stock does break ADR S or R, that's all the more reason to watch it for some funkiness to happen, and otherwise, so in most cases, those "boundaries" are helpful for gauging trades intraday, just like you did with AMR.
Great bottom fish there JV on AMR. Do you just have a calculator handy when you calculate these or what? Or are you that good at math? Lol.
I still have lots to learn...mentor me! =)
What's the link to the daily chat? I want to see some of these calls... you sound good.
yes I do use a calculator
should have bought TMA at close yest when contemplating
chatroom link is in my links
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