AAPL was a nice gap up and immediately positioned itself above R2 (I liked that!). It formed a min-B&B in the 5 min chart and I entered when price broke above it. The chart clearly shows a few potential entries throughout the day: one perfect C&H between 11am and 12:30pm, and a B&B between 12:30pm and 2pm. I held until around 3pm, when APPL printed 3 long green bars in the 15min chart, which brought the price close enough to the 50% fib extension drawn from the previous day low to the ORH (5min chart).
NNN was a briefing.com gapper. After gapping down it move quite fast, but it immediately rally to meet the 5EMA. NNN formed a nice B&B between 10am and 11am. I entered as soon as price broke the base. I took a partial at the previous swing long and expected the price to keep moving down, but the buyers stepped in and turned the tide. I exited as soon as price close above the 5EMA.
4 comments:
Your AAPL and NNN charts show some issues I have with trading the charts as they develop. AAPL is bought on a breakout of an NR/IB. NNN, the NR/IB is broken but you didn't buy it until later. I would have been caught out earlier on the headfake I think. What made you buy early in one case and wait in the other? Thanks!
Hi chartnoob~
For AAPL, the 8, 9, and 10 5min bars show a bullish star reversal pattern. Bar 10 was not as strong as I wanted, so waited for bar 11 to break above the mini Base (gray line). Bar 11 is very bullish, gets great support from the 5EMA, and closes very close to the ORH in the 15min chart, so although a bit risky, I felt bullish and entered there (but I could have waited for the 12th bar to break the 15min ORH.
NNN was not a NRIB play either. I saw that the stock formed a Base (gray line), that it did not have the power to rally to the 20EMA, and that during the formation of the base the volume diminished, that lead me to believe that if NNN could break the base, it would touch the swing low of the day.
Cheers
I guess that is where I am still learning. Thanks for the explanation, I actually traded AAPL ORH breakout and partialed out at around the same time. I guess its not really a NRIB setup though. Butw ith NNN, how would you classify bars 7,8 & 9? As the volume is decreasing, I think with bars 10&11 making lower lows, I might take this as a short signal. Thanks!
1. First three bars drop in the direction of the gap.
2. Bars 4, 5, and 6 are bullish.
3. Bar 4 leaves a long lower wick.
All the above tells me that there is price tension and that both bull and bears are willing to fight for control. So I do not want to be part of this fight until the direction becomes more clear that is why I would not seriously consider bars 7, 8, or 9. In fact, I did put this chart in the back burner after bar 6 and only discovered it again around 10:45. At that point, NNN had tried to take the 20EMA (without any success ) and was positioning itself below the 5EMA while forming a nice B&B. I took the trade when price broke the base because I thought it would try to recapture the swing low of the day.
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