Prepare for strong moves in these 3 stocks
The stocks that I traded
most actively Wednesday–especially during the first few hours–were
Boeing
(
BA |
Quote |
Chart |
News |
PowerRating), DuPont
(
DD |
Quote |
Chart |
News |
PowerRating), Doral Financial
(
DRL |
Quote |
Chart |
News |
PowerRating), Encana
(
ECA |
Quote |
Chart |
News |
PowerRating),
Fording Coal Trust
(
FDG |
Quote |
Chart |
News |
PowerRating), Texan
(
TXN |
Quote |
Chart |
News |
PowerRating), and XL Capital
(
XL |
Quote |
Chart |
News |
PowerRating).
The stock that produced the best trades was DD. It repeatedly came up on my
scanner and provided several good entry points. I have attached a chart to
signify my entry points as well as my exit points. Here is also a brief
description of what my day entailed in trading DD:
DD has been up the last few days on positive news. I was looking for it to push
through a resistance level at $40.87. There was some major news on the company
this morning, which include a $5 billon stock buyback. When DD opened above the
prior resistance level, I immediately went long at $41.05. I placed a protective
stop at $40.95. Unfortunately, I got stopped out immediately at the low of the
day at 40.95 and took a .10 loss. DD was extremely choppy trading from $40.95 to
41.20 for the first ten minutes of the market. I noticed that there were large
offers in the NYSE openbook at $41.30 and $41.50. I decided to buy stop these
two price levels for my entry points to go long. About 5 minutes later, I got
long at $41.35 and then again at $41.55. Since I was stopped out using a .10
stop on my original trade, I decided to use a .20 stop. DD definitely appeared
strong and I wanted to remain long with the upward trend. I was eventually
stopped out at $41.80 on the entire position. When DD approached $42.00 later on
in the day I used the same strategy that proved to be successful in the morning.
I placed a buy stop to go long at $42.00. I was filled at $42.06 this time and
DD went steadily up to $42.16 then immediately gapped up to $42.50. I realized
that this was a significant pop and sent a market order to cover my long
immediately in anticipation of getting the $42.50 or higher print. The
specialist had taken his offer up to $42.70 therefore I sent a market order to
the NYSE because I wanted to get the price improvement if possible.
Unfortunately the specialist gave me a fill at $42.35. I would have gone long
once again if DD traded up to $42.50, but never got the opportunity to enter
this trade. DD steadily sold off for the remainder of the day. Since it was in
an uptrend, I did not take part.
Stocks that I will be monitoring Thursday will be
(
BA |
Quote |
Chart |
News |
PowerRating), and
(
DRL |
Quote |
Chart |
News |
PowerRating). They
had excellent moves Wednesday morning and I will look for them to be active
Thursday as well.
I will be looking for DRL to trade above $9 and fill in some of the gap. If TXN
sells off, look for it to trade down and break its 200-day (sma). Anheuser-Busch
(
BUD |
Quote |
Chart |
News |
PowerRating) came in with lower then expected earnings and sold off heavily in the
afternoon. Look for BUD to continue its downward spiral and if the opportunity
presents itself look to go short when BUD breaks $40.50
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.
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