Trades Triggered on AAPL (Apple), CSCO (Cisco) and TDW (Tidewater) (21 Aug 2006)
The Market Today
The NDX has entered the murky waters of the sideways range of 1520-1620 established back in May and June. Also it’s had a nice 90ish-point run in the last few trading days. A pullback is natural here. The volume is dropping off rapidly (check the Qs), so this is still very healthy so far. A point of interest: Note that the NDX move was telegraphed days ahead of time by the 800lb gorilla Cisco. Waiting until an index breaks out can often put you a day late and a dollar short on catching the leaders’ moves.
The selling kicked in at 1300 on the S&P, of course. No problem in that reaction. Perfectly normal. What does concern me is that this thing looks weaker as it tries to claw back towards the May highs (around 1326).
Trade Updates for 21 August 2006
AAPL (Apple Computer) setup triggers short entry:
Apple triggered my short trade today. A trader who’s very liberal with his stops would probably set the initial stop on this trade at 68.66, the (8/17) high of the previous move. I’m much more aggressive with stops, and have mine just above the high (67.31) of today’s bar, at 67.35. My entry was a little ugly, at 66.80, so I’ve got a total initial risk (tah dah! “R“) of 0.55/share. Let’s watch…
CSCO (Cisco Systems) setup triggers long entry:
Cisco triggered a long trade today, a day or two sooner than I would have liked, but hey, c’est la vie. The strong late-day rally is promising, especially given the market’s ambivalence. The entry is above yesterday’s high of 20.90. The initial stop is at 20.55, just below today’s low of 20.57. This gives an initial risk (tah dah! “R“) of 0.35, very nice as it would allow you to pile into quite a few shares.
I know that being pointed different directions in CSCO and AAPL is likely to mean I’ll get stopped out of at least one of them quickly. Don’t know which, though, and I gotta stick with my rules.
Was about to shut the old ‘puter down and call it a night. Almost forgot this one:
TDW (Tidewater, Inc) setup triggers long entry:
This one is from one of last week’s posts. Originally highlighted by Dave Landry. I can’t say where he would call an entry, I can just speak for me. Here ’tis: Entry above 49.76, initial stop at 49.60, just below today’s low. Total initial risk (tah dah! “R“) of only about 0.16. Yummy.
ken said,
August 22, 2006 @ 8:17 pm
Hello,
I am new to your site. Where do you get the 49.76 entry point? What time frame are you using?
Thanks,
Ken
Will said,
August 22, 2006 @ 10:46 pm
ken,
Thanks for the question. I got the 49.76 from the high of the 8/1/06 “Very High Volume” up bar. It was within pennies of the 7/3/06 top of 49.83, and I give it more weight than that one because of the volume and the fact that it is more recent.
Some folks would use the next day’s high (8/2/06, 51.27) as a breakout point, but to me that day was simply the failure of 49.76 to hold and follow through. Notice how the subsequent 12 bars after the failure all fell *within* the range of that one “big one”. Support near its bottom, resistance near its top. Also huge “volume at price” — shares traded between about 47.00 and 49.50 over that two weeks or so. That one bar marked the line in the sand. I saw the break of its top yesterday (8/21) as the resistance giving way. Now only to wait and see if this break holds…
(I’m not extremely persnickety about the precise level… a nice round 50.00 entry would have been fine, since so many people focus on the $5 intervals. I just felt that if 49.76 fell, 50 would follow in short order, and I “need them 24 pennies!”)
Oh, and time frame– For the trades I take based on daily bars, I mainly trade off of 1-month and 2-month charts. Actually, I’d say I use about 20-60 bars back for every time frame, i.e. I may just be looking back an hour if using 1-minute bars on a really fast daytrade, or over a year if taking a longer position based on weekly bars.
Thanks for visiting!