Setups for daytraders who want action
With yesterday being the Columbus Day
Holiday 2005 everyone was expecting a quiet day of trading. That is
what I was expecting. I also heard some of this from the traders that came in to
my trading office in San Diego. Well we were all wrong. It turned out to be an
active day of trading with several news events driving stock prices.
The big mover of the day for me was Refco Inc
(
RFX |
Quote |
Chart |
News |
PowerRating).
Refco is a financial services company that came public in August of 2005. News
from the company related to undisclosed financial dealings of the CEO. Shares of
RFX fell $12.96, a drop of 45% to $15.60. The initial release said that the CEO
had paid off the receivable in question and that none of the events uncovered in
the internal review would affect the operations and profitability of the
company. I looked at this news and felt the stock could possibly bounce. When
RFX opened, I was looking for a good entry point to go long in anticipation of a
bounce. When RFX failed to rally and large sellers began to appear in the NYSE
openbook and the inside quote, I realized the opportunity was to the downside.
I was able enter a number of short side trades as well as
buying a few bounces in the morning. RFX was extremely active the last few hours
of the day. I became involved again when RFX appeared on my scanner as a new day
low at $18.40. Earlier in the day RFX had bounced up from $18.50 and I had taken
a long scalp for a 25 cent profit. Once RFX reached $18.40, large sellers began
appearing and I was able to enter a number of short trades for 40 and 50 cent
moves.
Look at the following charts for my entry points in RFX.
GM was another extremely active stock and was setting
many new lows throughout the trading day.
I will keep an eye out for RFX today because it traded up
around $16.05 in after hours trading. I will be looking for a bounce in this
stock unless it is trading near that support level of $15.60. Keep an eye on
(
GM |
Quote |
Chart |
News |
PowerRating)
and
(
F |
Quote |
Chart |
News |
PowerRating) as well.
There are earnings plays in
(
DNA |
Quote |
Chart |
News |
PowerRating), and
(
AA |
Quote |
Chart |
News |
PowerRating) so look for
them to be active.
(
CHK |
Quote |
Chart |
News |
PowerRating) and
(
SWN |
Quote |
Chart |
News |
PowerRating) are so oversold so I will be looking
for a bounce in these stocks if the opportunity presents itself.
Mike Kestler
Pease 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