Step Into A Slim Jim
Many times volume will precede price, and a great source of potential
candidates for day trades is the java applet’s “trades 100% average volume
before 1 p.m.” alert. This will scroll across the applet whenever one of the
stocks in our database trades 100% of its average before 1 p.m. ET during the trading session. When I see this alert on a stock come across the
screen, I first look at the daily and weekly charts to get a read on the stock’s
trend, then hit the intraday chart to check out the current price action.
Micromuse
(
MUSE |
Quote |
Chart |
News |
PowerRating) triggers a 100% average volume alert in the
morning during yesterday’s snap back from severely oversold conditions. Even
though the stock is in a downtrend on the weekly and daily charts, someone coming after this former glamour trades over 3 million shares by 11:30 a.m. and
runs up nearly 4 points to its intraday high. It then proceeds to pull back into
a Slim Jim just below the level of the high and an alarm goes up in the Insights
From The War Room:
Â
13:01:43
Intraday Setup Alert
Micromuse (MUSE)
is trading in a Slim Jim near the level of its intraday high. MUSE is
currently up 5.87 at 30.01.
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Momentum is clearly going higher at this time, based on the action on the
Nasdaq
(
COMPX |
Quote |
Chart |
News |
PowerRating), which has already started to churn higher. The stock
continues to consolidate in this pattern until the boys come back from their two-martini lunches in New York and decide to run the market up into the close. Two
keys on this chart that I like to see: a very slight undercut of the channel
then a reversal right away back into it — a very quick shake-out move, and a
narrow-range bar right before the breakout bar in the formation. Note the volume
on the breakout bar as the stock runs higher by nearly 3 points.
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This type of behavior is what Kevin Haggerty likes to refer to
as a “Shake and Bake” Slim Jim. Since late-afternoon rallies are often
powerful, this pattern is why Kevin has stated on several occasions that if he
could only trade one pattern on an intraday basis it would be the Slim Jim. They
occur every day, in every session. Using the java applet alerts will help you
uncover gems just like this one.
Have a great weekend!
Duke
P.S. – Big golf clap for Bel-Air Golf Club caddie Greg Puga from
here in Los Angeles, who qualified for this year’s Masters
tournament in Augusta by winning the U.S. Mid-amateur Championship last summer.
Despite shooting 76-80 the first two rounds and probably taking himself out of the running for low amateur, Greg
you are an inspiration for never quitting in pursuit of your goal. May we all be
as disciplined and unwavering in pursuing our trading goals.