Want quick daytrades? Here’s my 6 best names for Friday
Chop, Chop, Chop. This
seems to be the underlying trend for the stocks that have been showing up under
my favorite scan so far this week. Among traders, saying a stock is choppy means
that the stock is in a range or consolidation phase. That is to say, there is no
significant follow through to an upside rally or downside sell off. It is very
hard to make significant money with these types of trading candidates. I will be
lucky to be able to afford lunch, let alone pay my mortgage trading this type of
candidate. Of course this is all hindsight. If I knew the stock was going to
chop around, I would choose another candidate. If I find myself in a trade with
these characteristics, I try to take smaller gains and tighten up my stop losses
because the stock will most likely reverse and come back to where you bought or
sold it initially. I would rather take a small gain then no gain at all.
A stock that did have some follow through today was Corning
(
GLW |
Quote |
Chart |
News |
PowerRating).
GLW had negative news overnight and huge offers were being presented in the NYSE
openbook as well as by the specialist in the inside quote. Since GLW is exempt
from the up tick rule for shorting, I sold short immediately on the NYSE. At the
same time GLW was also being crossed down by ECN’s. This was confirmation that
there were a number of sellers and the trade should have some significant follow
through. I was able to short at 19.25. I began covering from 19 all the way down
to 18.82. At this point GLW started another big move to the downside but I was
unable to get short on any limit orders. Of course throwing out a market order
at this point, is just giving the specialist a license to print money for
himself. MY MONEY! The specialist was taking a long time to print between
trades. At this time I knew it was time to move on and go back to my scanner for
similar setups. On choppy days you have to be happy with making small strides
but you never know when a stock may move significantly.
Avon Products
(
AVP |
Quote |
Chart |
News |
PowerRating) is a stock that came up on my scanner
as a reversal. I went long 26.50 when a large offer was taken out. I immediately
placed a protective stop at 26.40. AVP has been hammered over the past week so I
was looking for a reflex rally. I was able to add in to my position at 26.60.
Avon rallied up to 26.90 and I got out on the closing print at 26.82. This trade
took a little longer to develop then most trades. But it is a direct result of
how slow the market was this afternoon. I think everyone is waiting to see what
kind of effect Rita will have when it hits the mainland.
With hurricane Rita looming over the nation I believe you have
to be looking at the oil stocks as well as the energy sectors. Also look at AVP
and GLW to see if they bounce back from significant sell offs over the past few
days. You might want to look at FedEx
(
FDX |
Quote |
Chart |
News |
PowerRating) to continue making new highs. If
FDX tests the $82 look for it to sell off and fill in some of the gap from
September 21.
Earnings plays to look at in the next coming days could also
prove to be traders. Look for
(
GIS |
Quote |
Chart |
News |
PowerRating),
(
WAG |
Quote |
Chart |
News |
PowerRating), and
(
PBG |
Quote |
Chart |
News |
PowerRating) over the next
few days.
Mike
Please e-mail with any
questions you might have at
mike@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.