BOOM Goes the Nasdaq with a Trade in KYPH

It was a nice trend day for the market indices as the Nasdaq Composite ran a healthy 40+ points. On days like these it can be difficult entering a stock. You may be waiting for a dip that never comes. I like to run a scan that alerts for Nasdaq new day highs (realtick has this feature). This works especially well on both strong up and down days. On up days, you see the same stocks continue to make the highs. Wait for a base and buy an intraday breakout. On down days, the scan tells you which stocks are showing relative strength. If the market turns up, you’ve already identified the strong stocks for the day.

I performed a few scalp trades using that technique today and traded BOOM and KYPH using the pattern day trading techniques I’ve outlined in my personal trading plan.

I spotted this perfect BL2 trading pattern in a scan last night. Kyphon Inc. was entered as it broke yesterday’s high. A stop was set below the day’s low. R was = to .20 after getting filled in a fast pop over the candlestick from yesterday. The stop would be raised using pivots. 3/4 of the shares were sold for 6R. The stock took off and never looked back. Anything can happen overnight, so only a 1/4 was carried over. The current stop is under the last pivot of 37.04 on the 5-minute chart.

BOOM, Dynamic Materials Corp., also triggered a BL2 day trading pattern. This equity ended up not going too far, and was held overnight. The stop is currently under yesterday’s low, but will switch to the low of today for tomorrow’s online stock trading fun.

The stock was entered over the 5-minute high on the stock chart above. We’ll continue to see how it plays out.

This market acts strong as a rotation out of oil stocks is happening. As usual, I won’t try and forecast market direction, but use the short term charts as my guide.