LCC: the trade that followed every rule

LCC was awesome Friday. I had shares ready to short but the best play ended up being long. Why was long the best play at the open and not short?

A huge market dump in the morning had many stocks sharply down at the open. First of all the five minute rule would have kept you out of the short until the stock decides which direction it wants to go. But the LCC open can also be looked at as an accelerated version of a reversal play. I've written several posts about this and this kind of play should be viewed as the exact opposite of the premarket leader drop. We all view the sharp rise of a stock at the open as a potential short off the highs- a sharp gap down should be viewed as a potential long also.

Also, having an idea of the dayrange as support should be kept in mind here. LCC lost 16% of its dayrange right at the open. Although it could easily have gone further down, once it made a significant move (>5% off lod ~ 6.35; or do like I do and wait 8-10% for entry ~ 6.50's) it was a reasonable entry long at that point. In addition, UAUA DAL NWA were all heading in the same direction. No need to wait for green here although a green entry also yielded good results. The red to green gave the stock even more lift.