If Your Trade Gets A Good Bid, Try This Technique
Entering a trade with
perceived edge correctly, is only half the game—to keep it real, you have to
be just as concerned with taking some off the table while you can.
Yesterday I wrote about intraday momentum plays. Today’s lesson reinforces my
belief that no matter how good something looks, it’s always appropriate to put
something out there if you are pleasantly greeted by an enthusiastic bid after
your entry into a stock.
09:46:13
Intraday Setup Alert
Metrologic (MTLG)
has gapped higher within its high level weekly base after reporting an upbeat
earnings report and forecast going forward. With the stock up 2.30 at 27,
MTLG is testing the 50-Day SMA after gapping above both the 20 and 50-Day EMAs.
Long continuation triggers thru session highs, and the 50-Day SMA might be
considered above the 15-minute consolidation highs of 27.70, or thru the inside
bar highs of 27.18 if the stock can hold session lows.
My personal preference is to have somewhere
between one-third, to possibly one-half of the position above the market at
approximately .60 to .70 above my trigger level as soon as the position has been
entered. This is done in conjunction with a mandatory stop loss order for this
type of volatile news driven issue. In this particular case, the ‘mo-mo’ entry
worked, but ultimately if you didn’t have a game plan for piecing out of the
trade while you could, you might have been calling something else other than the
stock a ‘mo-mo.’
Chris Tyler