Two wave correction off the highs after an earnings gap
- market gapped down big but found support on the rising sma 20 on the daily chart
- the low of the day was set in the first 30 minutes
- I could find no short trades I liked, but still traded PALM short for a loss
- There were plenty of opportunities on the long side but a good entry was important
- SMSI I found on the new 4 wk high scans just in time to enter at the right time
- The second slower wave down on the 5 min chart bounced off the rising sma 20
- Pace was ideal
- Stock is thin but trading on heavy volume because of good earnings news
- Entry was before it broke the high of the day for reduced risk
- It moved up right away but stalled after 10 minutes
- Put the stop to breakeven after the bounce on the rising sma 20/5
- Entry was @ 8.66, initial SL at 8.56. Risk 10 ct.
- Target was around 9 but by then it was moving pretty good so I dedided to trail behind the 5 min bars
- Closed half below the inside 5 min bar at the top
- Closed the rest 5 minutes before the close. Exit prices: 9.15 and 9.14
- RW/R=48/10 ct=4.8R
- result for the day: 4.8-1.1=3.7R
