October 10, 2014

Trade Recap - LAKE

Here was the daily chart for LAKE on Oct. 2nd:


So I pulled up this daily chart after seeing my twitter traffic as well as having watching this stock the day before on its first massive volume day. LAKE was overextended and trading in the red all day so I was short biased because the first red day can be deathly for an overextended stock, but I also wanted to wait to short until it broke any major up-trendline.

So I pulled up the intraday chart, drew my trendlines, and waited for the best opportunity to strike. I got my chances within minutes of getting home from work--around 2:45 pm. I shorted after the up-trendline was broken AND after the first bounce/retest of that trendline at $8.64. I also felt conviction because TKMR started pulling too. I set my stop at -18 cents and two price targets: +42 cents and +62 cents:


So LAKE acted as predicted and began to fade. I got a really nice washout at $8.50 and $8.40, but my first price target at $8.22 wasn't hit. I started to second guess my price targets because I had just witnessed two solid washouts--and one at a key inflection point ($8.50). There was some decent volume that came in too, but nothing too outstanding. However, my emotions began to take over.


So I covered half at $8.36. Then the price action started to jump around erratically the final 10 minutes of the trading day--confirming my intuitive suspicion and reminding me that I need to be batting for singles and taking profits. I'm not here to hit home runs, if they happen so be it, but my price targets are designed to make me consistent money; and, the price targets for LAKE were a little too generous. So I covered the rest at $8.30 because this price action isn't what I predicted.


I still made a good profit, and I'm mostly happy with this trade. Let's recap:

Strengths:

  1. Daily chart extended, first red day
  2. Entered after trend reversal, and at res/uptrend line/pop
  3. Set risk and 2 PTs
  4. TKMR started fading too, good sign
  5. Moved stop down after covering half
  6. Price action jumpy last 10 min, covered rest (respected chart, not emotions)

Weaknesses:

  1. SPY was green, rising tide lifts all boats
  2. Adjusted 1st PT due to emotions

No comments:

Post a Comment