Why I Considered The Trade
There’s a time and place for
everything. When the
market is extended (in many peoples’ opinion) and the most recent trade is chopping
around, in general the trade setups that I look for are going to be few and far between, compared to a more dynamic market where volatility is prevalent, and
price levels are being tested.
During these days I personally
tend to gravitate towards stocks that have made a dramatic move on the daily
chart. On stocks that have already made ‘the move’, I personally tend to focus
on those issues that might be worthy of reversing course due to a confluence of
technical factors such as a Fibonacci support zone and EMAs.
Case in point, in today’s trade
most of the morning was limited to a very narrow range consolidation in the
indices, so I started examining stocks in the ‘points loser’ list. The first
name to pop up happened to be a name that I was very familiar with. United
Online (UNTD), over the past several months has been a ‘strong technical
trader’ for a lot of folks in our chat room so I started looking for technical
evidence to support a reversal long off of session lows. In about 90 seconds I
was able to ‘pencil in’ a support zone that held the intraday lows. From there,
I first put out an early alert about potential price supports holding in our
chat, before any intraday patterns using the 5-minute chart had fully developed.
Later on, but not forgotten, the
opportunity for an official post was ready, as a Slim Jim formed on a pullback
from the session lows.
12:18:35
Intraday
Setup Alert
United Online (UNTD)
is trading in an intraday Slim
Jim consolidation off session lows. With the stock down nearly 6 points at
24.99, the issue has tested a Fibonacci daily support zone between approx. 24.50
-26. The current pattern might be considered for reversal longs above intraday
resistance of 25.18, which also puts the stock thru intraday trendline
resistance levels.
Definitely not an example of an ‘it’s too
easy’ kinda trade, but within a tough intraday environment, the edge prevailed
once again.
Chris Tyler