Friday, December 29, 2006

Closed out MBT swing trade

I closed out my position in MBT.....

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1. Why did I take this trade?
Because the stock was showing all the signs of a classic breakout pattern.

2. What was the initial stop?
Initial stop was 49.81, then moved up to breakeven @50.13.

3. Why did you exit where you did?
Because I have no clue what is going to happen next week. And, markets are now closed on both Monday AND Tuesday, so 4 days is a long time to hold a position in which I am not overly familiar with its chart behaviour.

4. Is there anything you would do differently?
Yes, sell into the gap up. MBT gapped up yesterday AND today, and both times, the gap closed. Market was losing momentum, so I could have been quicker to recognize that the previous congestion @50.5 has not been resolved.
In retrospect, the setup was not the absolute best - the breakout above 49 did not have the overwhelming volume explosion to move it above the congestion line. That would have made the trade easier to manage.

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