Online Stock Trading GDX for August 18, 2006

The stock market opened up another online stock trading opportunity in GDX, Market Vector Gold Miners. GDX is an ETF basket of gold mining stocks. The trade appeared on the 5-minute chart of GDX. This is one favorite pattern for the trading guy. It’s an opposite pattern of the BS3, and can occur on all time frames from the 5-minute to daily chart. This time the stock breaks out/up instead of down, and will be called a BL3 Bull Long 3. Notice the pivot low followed by a higher pivot low signifying an uptrend is at hand. Also notice the flat level of resistance. Technical analysis tells us that if that resistance is broken, GDX has bulls in control at that moment. The breakout should be bought. The stock trader enjoys this particular setup because there is a tendency to pop higher once the ETF, or stock moves over the intraday 50 day (red avg.). This trade was also going into the end of day trading period at 2:22 EST, when the stock market wakes up from it’ early noon nap.

This trade was taken when that resistance was breached at 37.83. A stop was placed under the low by a penny at 37.67 leaving R at .15. The day high at 38.55 was targeted.

The trade was sold at 38.1 for close to 2R. Stock trading wasn’t the best it could have been however. The trader fell victim to one of the problems facing many traders. He sold too early, and didn’t follow his trading plan. He also bought half the lot size he should have for R. Something to remember for the next online trade. Follow your plan!