Trade Recap - LAKE
Here is a daily chart of LAKE on Oct. 1st.
As you can see, this puppy was up big time and on serious volume. Apparently this company makes HAZMAT suits--and with Ebola being diagnosed in the US--the market felt this company may benefit because there is no tested vaccine and the one that supposedly works has run out. Anyway, I could care less; I'm a technical trader.
So I pulled up the intraday chart after coming home from work and noticed LAKE started a small re-tracement towards its uptrend line.
Being that this was the first green candle on the daily chart, I was long biased, despite LAKE's huge range. In this market, actually every market, the saying goes, "The trend is your friend." Moreover, I felt shorts were loaded in this stock based on the twitter traffic; therefore, I felt any decent pullback that didn't continue to flush would be met with a pop into the close. So I selected my entry at the uptrend line and set my stop a prior support.
LAKE pulled back, my order filled, and the stock continued to pull, hitting my stop. The uptrend line failed. So now I went into sniper mode looking for any sign of a trend reversal into the close that would panic shorts. And that's exactly what I got.
The downtrend line was broken in the last ~15 minutes of the trading day and I looked to enter at LAKE's next pullback. I got the pullback and entered long at $8.90 with a risk at $8.70--letting the stock tell me when to buy, not the other way around.
So since I had a 20 cent risk, I wanted at least a 40 cent profit--remember 1:2 or better risk to reward ratio--and set my price targets accordingly. LAKE popped into the close and I sold after-hours at $9.21 and $9.32.
To sum up:
Strengths:
Weaknesses:
As you can see, this puppy was up big time and on serious volume. Apparently this company makes HAZMAT suits--and with Ebola being diagnosed in the US--the market felt this company may benefit because there is no tested vaccine and the one that supposedly works has run out. Anyway, I could care less; I'm a technical trader.
So I pulled up the intraday chart after coming home from work and noticed LAKE started a small re-tracement towards its uptrend line.
Being that this was the first green candle on the daily chart, I was long biased, despite LAKE's huge range. In this market, actually every market, the saying goes, "The trend is your friend." Moreover, I felt shorts were loaded in this stock based on the twitter traffic; therefore, I felt any decent pullback that didn't continue to flush would be met with a pop into the close. So I selected my entry at the uptrend line and set my stop a prior support.
LAKE pulled back, my order filled, and the stock continued to pull, hitting my stop. The uptrend line failed. So now I went into sniper mode looking for any sign of a trend reversal into the close that would panic shorts. And that's exactly what I got.
The downtrend line was broken in the last ~15 minutes of the trading day and I looked to enter at LAKE's next pullback. I got the pullback and entered long at $8.90 with a risk at $8.70--letting the stock tell me when to buy, not the other way around.
So since I had a 20 cent risk, I wanted at least a 40 cent profit--remember 1:2 or better risk to reward ratio--and set my price targets accordingly. LAKE popped into the close and I sold after-hours at $9.21 and $9.32.
To sum up:
Strengths:
- Daily chart was great, first green candle, and good volume
- Set risk and two price targets for both entries before getting in the trade
- Cut losses fast on the first entry
- Wait for LAKE to tell me to buy--breaking the downtrend line
Weaknesses:
- Didn't notice TKMR was tanking (another Ebola stock apparently), which pulled LAKE down too around my first entry
- SPY was down a ton, -1.24%--i.e., stocks tend to follow the overall market
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