Here’s my upside target for the Nasdaq
Jea Yu has been involved with the
equities markets for over 10-years. He specializes with intraday trading in the
U.S. equities and futures markets.To receive a free 7 day trial to Jea Yu’s
Underground Trading Pit,
click here or call 1-888-484-8220 ext 1.
The
(
GOOG |
Quote |
Chart |
News |
PowerRating) and
(
ADBE |
Quote |
Chart |
News |
PowerRating) daily pup
breakouts pointed out on
Wednesday played out very well for us. Pup patterns are when the 5-period
simple moving average stalls sideways as the 15-period simple moving average
continues to rise. Mini pups are when the lead %d stochastics stalls on the rise
as the laggard %dslow stochastics continues to rise to form a wedge like
breakout
ADBE reached its daily upper Bollinger bands at
33.65 target hit from our 33.18 entry and GOOG gave us a nice $5.50 gain on the
morning gap (we were long from 397.80 to lock 403.30) as well as a doubler on
the Nov 400 calls from $2.50 entry to lock $5 for a 100% two day gain. Even more
interesting is how we played out of the money GOOG 400 calls just 2-days before
options expiration when GOOG was trading in the 397s meaning this was pure time
premium. However, since daily dual pup and mini pup formations are the most
powerful 2-day breakout patterns, it was a no-brainer trade.
A dumper is a stock that gaps down several or
more points after a news event like earnings.
(
ADSK |
Quote |
Chart |
News |
PowerRating) was a dumper this
morning on weak earnings guidance from 47.10 close. On dumpers, we usually like
to wait for the 3-minute 5-period simple moving average to either reject the
bounce or base and provide a support for tightening up to the 15-period moving
average.
ADSK met this criteria Friday morning as it gapped down and then took a bounce
to test and get rejected off the 3-minute 5-period moving average. We took
shorts at 41.95 at 9:43am as the 3 minute stochastics formed a mini inverse pup
pattern when the 3-min 5-period moving average rejected down. Our trail stop sat
at the 3-minute 5-period moving average around 42.15. ADSK promptly leaned down
hard to lock 41.25 overshoots, out + .70. Eventually ADSK leaned to 40.56 before
bouncing. This was a classic textbook dumper short set up and one of my favorite
consistent money makers.
The Nasdaq finally broke out through that
critical 1668 line in the sand resistance I mentioned last week for very nice
ramps up to 1695 peaks. Watch for continued follow through up to the 1703 x 1710
level next week with supports at the 1670 level. Good trading all!
Jea Yu
Jea Yu has been involved with the equities
markets for over 10 years. He
specializes with intraday trading in the U.S. equities and futures markets.
Jea also is co-founder and lead analyst at
www.Undergroundtrader.com, the
premier
online chatroom for active traders and voted Forbes Best of the Web for
active traders four years in a row. Undergroundtrader.com has catered to
over 7,000 traders wordwide since its 1999 inception. Mr. Yu has authored
best sellers “The Undergroundtrader.com Guide to Electronic Trading†and
“Secrets of the Undergroundtrader†both published by McGraw Hill and two
videos “Level 2 Warfare and Beating the Bear†from Traders Library. Mr. Yu
is a popular guest speaker at the Online Trading Expos and has been
interviewed and quoted in major publications such as The Wallstreet
Journal, Financial Times and USA Today as well as having several feature
articles published in Activetrader Magazine.