Sorry, I Have No Crystal Ball
Every now and then I get an e-mail questioning the worth of the surge and
plunge alerts that we post on the TradersWire. The
majority of the writers inquire incredulously why we bother to post an alert on
a stock that has already moved 3 (or more) points. “I don’t need to know
this after it has happened, I need you guys to tell me this information before
it moves!”
Okay, now let’s step back and take a reality break. The fact is, no one has a
crystal ball to see into the future, which is what it would take to fulfill
wishes expressed in these e-mails, and trading is about recognizing the possible
direction of price movement based on what has occurred in the past, be it in the
past months, weeks, days or yes, even the past few minutes. Surge and plunge
alerts do serve a valuable purpose, once you grasp the idea of how they can be a
harbinger of a potential profitable trade taking shape. In the first hour of
trading this morning, Veritas
(
VRTS |
Quote |
Chart |
News |
PowerRating) showed us exactly how this
strategy takes shape. Twelve minutes into trading, the first VRTS alert
appeared:
09:42:36
Plunge Alert
Veritas (VRTS)
has dropped more than 2 points since the opening bell, now down 2 1/8 to 52
1/2.
A look at the daily chart showed VRTS to be in a downtrend since the last
week of January, and the stock has a wide-range bar with a down close on
Thursday, March 15, so the short-term activity of the stock appears to be to the
downside, keeping in step with the overall trend.
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From there a look at the five-minute intraday chart showed a pullback from
the intraday low was taking shape, so a new alert went out on the wire:
09:57:33
Intraday Setup Alert
Veritas (VRTS)
is forming a pullback from this morning’s intraday low following a thrust to the
downside. VRTS is currently down 7/8 at 53 1/4.
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VRTS dropped more than 2 points after the 9:57 Intraday
Setup Alert as it retested the intrady low. This is the correct
way to capitalize on first-hour action with the fast-moving stocks in the surge
and plunge alerts. Take a look at the daily chart for a pattern setup, then look
at the intraday action for a setup to key off of. Stocks make a number of moves
back and forth intraday, so don’t assume it’s over when a good-sized move has
taken place.
Until tomorrow,
Duke
P.S. There are a few swing setups taking shape. I hope to be
able to point out a few ways that swing traders can benefit from the TradersWire
in the next couple of days.