Stalking 101
It is always a good idea to trade in the direction of the market, and I
certainly consider myself a dues-paying member of the Trend Following Moron
Society (TFMS). However, sometimes the best trades are fleshed out a day or two before
they actually come to fruition.
11:16:53
Veritas (VRTS)
is pulling back from its high of two days ago. The stock is also currently
forming a bullish Lizard tail, but we will have to wait for the close to confirm
the signal. VRTS is down 0.96 to 75.04 and holds a 3-month
relative strength rating of 83 from TradingMarkets.com.
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Why is Veritas
(
VRTS |
Quote |
Chart |
News |
PowerRating) interesting today? When a stock bucks the
trend, opposing either the upside or the downside, it is talking. It is our job
as traders to listen to this price action, for when the market does turn, stocks
that act in this way are often the leaders of the rally.
In the activity following the 11:16 post, VRTS reversed its course and
recaptured yesterday’s close. This allowed aggressive daytraders the opportunity
to front run the trade over the close out of an intraday cup and handle, and
more cautious ones an opportunity out of a pullback after the breakout from the
cup and handle.
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The stock is now pulling back to the 38.2% retracement of the
intraday low to high, and could possibly make another probe back toward
the high. And on the daily? The stock is continuing to hold on to the top half
of today’s range, so I am going to continue to keep it on my radar in the next
few sessions to track for both intraday and daily setups. If you are a daytrader,
get in the habit of looking at the intraday patterns in stocks that show
interesting action on their daily charts. You will be rewarded for your efforts.
When stocks go against the grain, you don’t have to jump in right
away, but you are short changing yourself if you don’t continue to monitor the
issue to see if it becomes one of the leaders when the next charge higher comes.
Until tomorrow,
Duke