Trader Mike

Michelle B submits:

On Tuesday, April 24, approaching 2 PM, the time of the day that I regard as the Period Of Treachery—fondly referred to as POT—I noted MNST screaming red on the low ticker. I checked to see if there was news to explain the decline, and there was none. I quickly called up an one-minute chart of MNST and noted the two measured down legs.

Then I determined possible support via the thirty-minute and daily charts at around 43.40.

Price never touched the gap support on the daily (see below), but I let …

Michelle B submits:

LP, in a recent comment to this blog entry, expressed interest in understanding trades based on capitulation. Capitulation means that there are no more sellers for the moment, and the stock price will rebound sharply. The most important aspect is not to confuse capitulation with the low-grade drip, drip of continuing distribution, better known as the infamous falling knife. The two down legs shown in the chart below are distributive in nature, though quite vigorous, while the third and final leg down represented capitulation. Another important aspect is being able to know when they are happening—in my case, it’s my watching the hi/lo ticker that finds these kinds of trades.

Michelle B submits:

After noticing PSA on the top ten losers’ scan on the NYSE during this past Friday morning, I checked out its daily and saw a potential second, measured down leg from a bear flag:

PSA gapped down a bit at the open, did a down leg, based at its lows, and then at 1 P.M., a delectable 30 minute NR7 formed. When the NR7 broke to the downside, a second, measured intraday down leg happened on strong volume.

When the intra chart pattern echoes the daily chart pattern, a high probability trade results.

Despite the clarity and potency of this setup, PSA in …

Michelle B submits:

Estocastica described his trade in MCO yesterday. From noon to 2 P.M., MCO traded in a very tight price range which was essentially a bear flag. This bear flag inclined into the descending 15 minute 20 sma on low volume until shortly before 2 P.M. when the volume picked up a bit, but with no significant increase in price. Then at 2 P.M., it resumed its downtrend, with another leg down on good volume. Happily, Esto didn’t jump his stop and stayed with the trade, despite that annoyingly tight range it did for a couple of hours.

2 P.M. is one of those special times in the trading day. One of my …

Jerry wanted my thoughts on Garmin Ltd. (GRMN), NutriSystem Inc. (NTRI) and OMNI Energy Services Corp. (Nasdaq: OMNI):