Wednesday, October 04, 2006

Light at the End of Chop Tunnel?

I've held onto most of the trades that I made yesterday, with the exception of AMR. That stupid AMR, gapped down below my stop loss, aargh! I was glad to get rid of it @24.3, let someone else fall in love with it.
Only made two trades today, although I certainly felt the urge to chase many more.
First up was RFMD:

I bought RFMD on a break above prior resistance @7.8. I was a little bit worried about that gap left behind yesterday. But the stock did not try and test yesterday's lows even after the first hour. In fact, the stock behaved well all day - no chopping around, no temporary spike below the trendlines like in the next buy that I made.

This was my next trade:
I entered @12.32, with a stop @12.23. I didn't like what I saw an hour later, and bailed @12.29, before it even dropped to my stop. I've been trying to avoid trading intraday, but sometimes you just can't avoid it when you're dealing with choppy stocks. Looking at choppy stocks (such as HGSI) provides fuel for the argument that the MM's are manipulating stock prices intentionally in order to take out stops. Compare that with the 5d picture of RFMD:
There's certainly a case to be made in trading stocks that behave .... less choppy? Especially in the choppy markets of September.

1 comment:

Vincent said...

I've got same story with HGSI except I got stopped out instead of getting out early.
Yesterday was the first day in a couple years that I traded intraday. I had HGSI on my swingtrade watchlist but did not put in my order to enter. Seeing the volume and all, I decided to do my first dummy trade instead. I got filled at 12.32 with the stop at 12.24, a coincidence, i swear! Needless to say I got stopped out. Maybe the MMs are gunning for stops, but it's their prerogative since they've got the bigger bankroll, imho. Just more stuff for me to watch out for, i guess.
Oh well, SBUX, my other dummy trade of the day, more than made up for it.