Stock Trades in LCC NFLX and SLAB

We had some nice volatility in the stock market today as the Nasdaq took a 37 point dump. As usual, stock market patterns were used as a guide for a few successful trades.

A BS2 was spotted in US Airways, LCC. Unfortunately, I passed on it as the stock wasn’t really in a downtrend on the daily. It pays to pull the trigger and not let emotional bias get involved.

Analyzing your mistakes will help you not make them next time an opportunity strikes. LCC offered a risk of .25. Potentially, a 4 to 6R trade could have been achieved. The market was heading lower and there was plenty of stock sitting over head on the daily chart. That would act as resistance. The stock played out perfect. Stock trades such as this can really make up for your 1R losers. You’ll have to grind out profits if you stick with 1 and 2R targets constantly.

Netflix, NFLX was traded using a BL2 pattern. NFLX gapped higher on a day that the market as a whole opened up lower. The Nasdaq started the day 16 points lower. It’s sometimes easier to trade with the trend of the whole stock market, but it really isn’t necessary. Netflix pulled back after the open and put in two bottoming tails on the 5-minute chart.

The entry triggered, and allowed for .30 risk. Since the market was acting weak and didn’t look to bounce too easily, a target was set at 2R. 1/2 the stock would be sold at 1R, and the stop moved to break even. While the stock had relative strength compared to the market, it wasn’t worth pushing. Also, the 50 day moving average was directly above on the daily chart which would act as resistance.

This trading strategy worked out for the NFLX trade.

SLAB, Silicon Laboratories Inc. had been bouncing off support for a week or so and presented a BS3. The stock was sold short as soon as it broke the lowest point of support. A stop was set at day high. The market was heading down which should help this trade, as it’s sector was weak. Notice the nice space directly below support. Past buyers have probably sold leaving less support around. A 1R target was given for the day for half the shares of SLAB. It ended up giving 1R for all the shares as the position was closed near the end of the day.

It’s sure easier shorting a stock in a downtrend than trying to fight a stock going higher. Short low, cover lower.

The NFLX trade was found after looking at stocks gapping before the open. SLAB was found the night before and an alarm was set. The LCC trade appeared after scanning a list of around 100 stocks I keep on my screen. The point is, that stock trades show up by using many different scans. Pick a few and stay with that routine.