Shared by
ckz8780
Intraday flag break. I thought this was going to go for one more run but it just didn't have the juice. I cut it for a small loss when it broke the base of the flag.
2000 shares
-$140.00 (-3.95%)
Execution detail:
| Date/time | Symbol | Side | Price | Position |
|---|---|---|---|---|
| 2013-10-02 14:31:35 | GNVC | buy | $1.840 | long |
| 2013-10-02 15:00:08 | GNVC | sell | $1.770 | 0 |
Comments
ckz8780
When considering whether something is "too extended" I look at a couple different things:
1) How many days in a row is it up on the daily? More days up in a row = more extended
2) Is it making new highs or entering a congestion area? (Will it run into resistance on the daily even if there's a good intraday setup?)
3) How much is it up for the day and what's the average range of a daily move lately?
In this case, we see this is a big spike after it consolidated for five full days, so it is not extended on the daily. It also was breaking out to new highs at this point so it wasn't entering a congestion area on the daily. Finally, it was near the top of its range based on its average move the last four big green candles so it was running out of gas at this point. While I wouldn't call it extended, this stock was definitely running low on gas at these levels. The last day it ran big like this it stalled at about a 50% gain on the day and this one was at around 43% if it hit my target. It was likely to stall near my target anyway so I dunno.
the short answer is no I don't think this was extended at my entry because it was an excellent, tight intraday setup, but yes, it was running low on gas since it was nearing the top of the range it had seen on its last 4 big momo days.
johnc_BOWS
davewaztrades
New traders who are trading these smaller cap stocks should read the above comment from Chris carefully. There is serious value here.
markmandy54_BOWS
Great info Chris, i printed it out and now up on my trading board.
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I think it was a good entry. Too bad it didn't go. I occasionally get comments that stocks like this are too extended at your entry-- do you think it was extended or do you think the market's volatility today impeded the breakout?