Here’s one of my favorite daytrading patterns
Shooting star candles on gappers
setup one of my favorite short trades. A star is a candle that opens
and makes an extreme pop and then closes at or near its low. This is indicative
of panic buyers who chase a stop up only to have it peak out. When the price
slips below its opening, this triggers the same buyers to panic sell out. Once
again, I LOVE playing these setups as shorts, as long as I get a stochastics
peak off a high band.
We had a nice trade today on
(
IMCL |
Quote |
Chart |
News |
PowerRating) as it gapped up on
the open to peak at 36.50 and then sell off into the lows setting up a 3 minute
shooting star candle. We took shorts at 36.10 as the 1 minute stochastics
momentum peaked out and slipped back under the 80 band. IMCL promptly slipped
back down for a very nice channel tightening lean back the last pivot on the day
at scalp out the overshoots at 35.57, out + .53. This is a three step simple
process: get the shooting star to form, take the short into the stochastics 80
band slips, target 5 period moving averages/pivots. Trail the opening price or
high of the body of the star. This setup works excellent especially on gapper
stocks in the earnings season.
The Nasdaq 100 e-minis took an impressive bounce off lows to
PEAK at the daily 5 and infamous 50 period moving average resistance at 1706.
These are the key resistance levels to watch. A failure to break that daily 50
period ma leans to a potential daily mini inverse pup to 1648 levels on the
daily lower Bollinger bands.
Good trading gang!
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. To receive a
free 7 day trial to Jea Yu’s Underground Trading Pit,
click here or call 888.484.8220, ext. 1.