Learning From Your Successes
While I find it instructive to learn from my
mistakes, I also like to review my most successful trading setups in order to
find the characteristics they most have in common.Â
One setup that I gravitate to occurs when I see a confluence of factors that
suggest strong support or resistance at a certain price level.
This is what I saw in Affymetrix
(
AFFX |
Quote |
Chart |
News |
PowerRating) on Monday with this TradersWire
post at 12:08 PM ET:
Affymetrix (AFFX)
is bouncing from the lows of its five-week trading range and an intersection
of its 50- and 200-day moving averages. Traders will be watching
follow-through that would take AFFX back to the highs of its range and a
potential breakout attempt. AFFX is up 6 3/4 at 172 and has
a TradingMarkets.com
3-month RS ranking of 49.
Two hours after this story appeared, AFFX was up 18 3/16 for a gain of 11%.
While the action coincided with news that AFFX had signed a deal that
would give two Johnson & Johnson
(
JNJ |
Quote |
Chart |
News |
PowerRating) subsidiaries access to its
GeneChip arrays, it was AFFX’s chart that caught my eye.
There was nothing complicated or overly subjective about this setup which
combined the support of AFFX’s range-lows and its 50- and 200-day moving
averages. It was just a confluence of factors that, taken individually, would
have meant relatively little.
But collectively, they sure did pack a wallop.
See you tomorrow,
Eddie