Novellus Systems Inc - NVLS Trade

The stock of semiconductor equipment manufacturer, Novellus Systems Inc - NVLS, was the 2nd stock on my list that I spotted a trading pattern in. Novellus has been trading in a gradual uptrend the past two months, not straying far from its channel. This morning, the stock gapped down to it’s 50 day moving average. From past technical analysis, I’ve seen many stocks continue down the same day they lose the support of this moving average. My bias was down.

The 5-minute chart attempted to put in a BL2 (buy signal), which quickly failed. The 4th candlestick would act as R, with a short executed below it. This had a risk of .16. Using the pivots as stops yielded a 2+ Reward on the trade if held to the close. It’s too bad I failed to pull the trigger on the trade.

Today in the TEVA trade, and in this NVLS trade, I made two popular mistakes traders have trouble with. After a few days of trading light, I need to be prepared for a number of trading opportunites that may come my way. I’ll get the next one.