Trader Mike

I’ve been tracking several stocks that I traded a week or so ago which are all tracing out similar patterns. They shot to multi-month highs and then pulled back/consolidated for 3 to 5 days or so. The play is to just draw a trendline across the top of the consolidation and buy the breakout. Jamdat Mobile was a great example today. And while I have to admit that I agreed with Kirk’s skepticism over the news which propelled this stock today that didn’t stop me from trying to jump on board (I never did get in today). I’ve seen some real POS-es run much harder than this on no news at all. (I’m not calling JMDT a POS) I just try to keep in mind that the crowd may be stupid but they’re stronger than me. I can choose not to run with the crowd but if I try to run against them I’ll likely be crushed.

Anyway here’s the JMDT chart along with some others showing similar action (STMP, CKCM and AQNT):

Stamps.com has dropped about 10% since I posted it last weekend and JD wants to know if this is a good entry point. The stock sliced right through the trendline I drew last week but it did find support at 20. This actually looks like a pretty good spot to try it long. The reward:risk should be good assuming a target of at least the old high of 22.88 and a stop just below Friday’s low of 19.6. (I might actually use the upper Bollinger Band as my target, which is just over 24) I’d wait for the stock to prove itself by breaking above the blue downward sloping trendline before I’d buy it …

And finally, since Luna’s one of ‘The Few, the Proud“, he gets a third chart today. I actually bought STMP on Friday. Despite the two previous bearish candles I was thinking that it would bolt higher if the market was strong on Friday. I bought it when it broke above Thursday’s high. Once the market started rolling over I tightened up my stop and got taken out.

I’m still bullish on the stock but I don’t see a good entry point right now. I’m going to keep watching for a retest of its trendline before I try buying it again. Basically, I’m looking for a repeat of what it …