Jul 13 - MOS

Today I had a great day and Friday was good as well. Friday I played MOS on a capitulation setup and today I played MOS again while it held the support line.
The chart below shows the 15 chart of MOS for today and you can see how the line slightly below $40 held as support during the capitulation on Friday. It also held as support during the first hour of today's session holding above that line on closing basis. I liked 4th bar hammer-like but volume was low and I was not totally convinced so I waited for a more clear indication (I should have scaled in). I entered after a WR bar and a doji that closed above the 5EMA. I held until the end of the day and it worked very well.


Friday's trade was more risky (I find the capitulation trades to be in general more risky) but it worked. I managed it with the 1min and 5 min chart. I think it is good to have a realistic target in mind for these trades since it is unlikely that the buy action will have the same force as the sell off.

October 23 - LUK (capitulation + mini C&H)

LUK appeared in the Top % Losers Since Open scan on my IB software.

I spotted the capitulation on the 5min chart but I traded the mini-C&H bounce on the 1min chart. The initial target was the 100% fib extension drawn from the low of the cup to the base, and my exit was the 1.38% fib extension. Both targets were met without any difficulty.

October 2 - AAPL (Capitulation)

This was very similar to yesterday's trade. The first part of the action is capitulation with increased volume, and then a "relatively" nice C&H. I played this one as a target trade to the S2 line, so I exit my full position there. I was a bit surprised when price moved above S2 and for a moment (12:15bar) it seemed like S2 would hold as support. But that did not last long; price immediately collapsed.

October 1 - SU (Capitulation)

I continue experimenting with the capitulation setups. The basic principle with this setup, as I see it today, is that after capitulation (extreme move with high volume in one direction), the market would most times attempt to self correct the price imbalance, creating a sort of bounce from the bottom of the move that is, at times, quite fast.
The tricky part about these setups is to be able to identify when the true capitulation takes place; one also need to have good timing to get in for the move in the opposite direction (bounce). An additional challenge is that price sometimes would not revert immediately so it is hard to predict direction.
In the case of the SU trade, the parabolic move with wider bars and higher volume was the clue that this was real capitulation. And the series of higher lows was an indication that eventually price would spring back up. I did not like the fact that the bars that formed around S2 had long higher wicks, but I decided to take the risk and go for it because the previous day low (marked in black in my chart) was a reasonable target.

August 26- COCO (capitulation setup)

I always study charts but over the last few weeks I have been studying charts like crazy. Trading has been quite challenging for me, so I had the need to keep my studies up. One of the trade setups that I have been studying is the Monster Capitulation setup. Michellle B., who used to post at Trade Mike’s site, wrote this wonderful article some time ago. I find myself coming back to this article again and again because it is really good. (By the way, if anyone reading this post knows where Michelle B. might be hanging out these days, please send me an email at 2001anarco@gmail.com. I really would like to be in touch with her.)

The COCO trade today was an attempt to practice the capitulation setup. I would really like to master theses setups since there are always stocks in capitulation mode, which means there are always good opportunities. The annotations in the chart marked what I saw and how I executed the trade.