Here’s 6 stocks for intraday setups
Thursday’s market was an
event-driven market with wide swings. During the first hour of
trading, there was a lot of intense stock selling that did not show up in a
large index move. Â
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My first trade involved Altria Group
(
MO |
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PowerRating)). MO appeared on my scanner
as a “crossed down†market. Not something you see a lot of with huge, highly
liquid stocks. Crossed down means that the offer is currently lower than the
bid and that the offer is sizable.
The scanner is designed to find this particular
situation because this situation means something. It means that someone has come
into the market to sell some stock and the specialist is throwing up the huge
offer to get everybody’s attention. I was unable to get short on the NYSE or on
an ECN. Everybody that had been a buyer immediately pulled their bid. The NYSE
specialist dropped his bid from $70 to $68.50. The specialist ended up printing
$68.75 with large blocks and huge volume. This is what is known as “clean up
prints.†As an experienced trader, you could identify that this was not an index
driven event, but in fact a large seller coming into the market to sell a large
number of shares. I immediately bought Altria as I saw the huge volume at 68.75.
I bought in anticipation of a bounce. The risk of course is that the seller is
not done, therefore I did not add to my position. If the seller comes back into
the market, the price will fall again. As it turns out I had an excellent entry
point at $68.75. MO rallied back to $70 and I scaled out of my position and was
flat by 69.50.
I was not at my desk for the later index move. In my humble opinion (IMHO) the
downdraft was caused by an announcement by Refco
(
RFX |
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the markets. The fear was that Refco might not be able to meet in obligations as
a Futures Commission Merchant. As the CFTC stepped in to clarify the situation,
the markets stabilized and moved higher. Several of the traders in my office had
great trades with Chicago Mercantile Exchange
(
CME |
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Other stocks that I traded Thursday were Johnson & Johnson
(
JNJ |
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Harley Davidson
(
HDI |
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(
GM |
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JNJ was another stock that I was active in throughout the morning. It first came
up on my alert as a previous day high and then once again as a 5 day high. JNJ
continued to trend upwards in a steady fashion all day long. If you look at a
daily chart you will see that JNJ broke the 10, 30, and 50-day moving averages.
I used a .20 trailing stop with JNJ and I got shaken out of some trades, but
when JNJ was active in the morning and late afternoon you were able to take
advantage of a number of nice upside moves.
Other stocks that I took interest in and may provide you with opportunity Friday
and Monday are
(
AMD |
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(
PFE |
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(
GM |
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some of the earnings plays in
(
GE |
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(
FDC |
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(
UNH |
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PowerRating). Don’t forget
about Refco–if it opens up there may be some opportunity to either side.
Mike Kestler
Please e-mail with any questions
you might have at
mkestler@evotrading.com
Michael Kestler is a
full-time professional trader and managing partner for Evolution Capital LLC., a
proprietary trading firm. Mr. Kestler specializes in intraday trading of NYSE
listed stocks. Before founding Evolution Capital LLC., Michael began his career
on the floor of the CBOE. Mr. Kestler was previously a Mid-Cap and Nasdaq Market
Maker. www.evotrading.com