5 stocks I’m looking to trade today
Yesterday’s market traded in a rather
tight range with little activity or movement in either direction.
Following the opening rally the Dow seemed to trade in a very tight range
throughout the day with the larger moves trickling up or down during the course
of the day.
The biggest opportunity presented itself just after news was
released on the housing market.
(
PHM |
Quote |
Chart |
News |
PowerRating),
(
TOL |
Quote |
Chart |
News |
PowerRating),
(
BZH |
Quote |
Chart |
News |
PowerRating) all appeared on
my scanner reaching new day highs by over a point. Not recognizing what was
happening, I was unable to react quickly enough and establish a long position.
Since I failed to get the entry point to the long side, I
looked for an opportunity to sell short. It is important to recognize when you
are late on an entry it is better to wait and prepare for the next move. Since
all three of these stocks traded up over a point, I wanted to look for an
opportunity to take a short position feeling perhaps that the gains were an over
reaction to the news.
PHM initially gave me an entry point at $42.70 to go short but
by reading the tape, I quickly took a loss when I recognized a buyer stepping in
at $42.80. I was able to cover at $42.89. PHM continued to surge upwards and as
buyers appeared in the tape, I took a long position at $43.00 and quickly
stopped out. I realized PHM clearly had lost momentum as sellers began to appear
in the tape and the NYSE Open Book.
Since PHM was clearly extended on a 5-minute chart I decided
to establish a short at 42.85. Sellers began piling up in the NYSE Open Book so
I felt that I had the proper short position on this time. Observing that PHM was
finally selling off I added to my short at $42.70. Taking profits, I began
covering my short around $42.45 and was completely flat by 42.20. PHM eventually
sold off below $42.00.
Since the Dow seemed to be in such a tight range I did not
want to see my profits slip away. I choose to lock in profits and re-enter into
the successful trades rather then try to pick a top or a bottom and capture the
full move of the stock.
A stock that I had some success with to the downside is
(
WYE |
Quote |
Chart |
News |
PowerRating).
WYE broke a key support level at $42.50 and trickled down to $41.88. I will keep
an eye on WYE to see if there is a continuation to the downside today.
(
GME |
Quote |
Chart |
News |
PowerRating)
had earnings yesterday and appears that it could break its 50-day simple moving
average of $34.12. Keep it on your hit list in case we get a down day. I will
also keep an eye on BZH, PHM, and TOL to be active as well due to the fact they
all sold off throughout the day once the so called “favorable news” was
released.
As a daytrader,
finding opportunity and having the ability to move quickly in and out of a
liquid stock is essential. Recognizing the price action, reading the tape, and
identifying the true buyers and sellers is the skill set I will be teaching
along with strategies that I use to enter into my trades during my
Professional Day Trader’s Boot Camp held Dec. 4-Dec. 7.Â
Click here to register now.
Mike Kestler
Please e-mail with any
questions you might have at
mkestler@evotrading.com
Michael Kestler is a
full-time professional trader and managing partner for Evolution Capital LLC., a
proprietary trading firm. Mr. Kestler specializes in intraday trading of NYSE
listed stocks.
Before founding Evolution Capital LLC., Michael began his career on the floor of
the CBOE. Mr. Kestler was previously a Mid-Cap and Nasdaq Market Maker.
www.evotrading.com