When It’s Time To Be Aggressive
One of the keys to entering a successful
momentum trade is knowing what’s ‘hot.’ We all have our opinions about what
we think the proper value of a stock should be at any given time, so it can be
difficult at best to pay a ‘premium’ for a stock that was just offered. The best
traders though, tend to focus more on what other market participants think is
hot, and are more than willing to ‘cut in front’ of the crowd to get in on the
good action. With that in mind, you might have a better idea of how you should
execute an order.
It’s kind of like the game where you have to
choose the girl at the party that everyone else thinks is the most attractive,
possibly putting aside your own thoughts on the matter. When it’s obvious
that there is crowd gathering around one very attractive lady/stock, you might
consider ‘stepping up to the plate first’, or at least being aggressive with
your ‘bid’ to solicit her affection.
For instance, if a stock is demonstrating very
hot relative strength, but sets itself up temporarily against a wall as it waits
to be taken by a gathering crowd, you had better be ready to be the first
one there, or aggressive enough to show the object of your affection just how
much you want her, by being willing to pay up. In the case of daytrading, that might
mean either a market order, or a limit order to buy stock slightly thru existing
offers when you really want to scoop her off her feet.
09:23:39
Pre-Market
Equity Situation
Inter-Tel (INTL)
is trading up about 10% in the premarket on a better-than-expected earnings
report. This action has the stock testing prior highs, and potentially
lending itself to one of two trade opportunities. The first scenario would be
a potential short entry out of possible Opening
Reversals against this resistance area. The next scenario that might be
considered would be the trade continuation follow thru play. With the early gap
the stock is a potential Taglia
Gap candidate. This strategy looks to go long stocks that qualify
under Taglia rules. If INTL maintains it’s strength the strategy triggers long
entries above the 15-Minute high with protective stops .50 below entry. In the
pre-market Inter-Tel is trading up about 2.5 points, at approximately 24.50.
10:56:03
Intraday
Setup Alert
Inter-Tel (INTL)
has managed to hold on to it’s early gap higher, and still qualifies as a Taglia
Gap. Intraday, the stock is forming a 5-Bar consolidation near highs for
triggers thru the 25.25 level. Consolidation entries confirm the Taglia trade,
but may afford tighter stop placement if one uses pattern supports of 25 as the
initial risk. INTL is up over 3 points at 25.13.
In today’s session it seems the only way to play
was by being aggressive. As you can see from the volume that preceded price,
there were a lot of ‘guys’ lining up, but there was still enough to go around
for those willing to reach out with their hands, and scoop her up away from the
wall and onto trading screens everywhere.