EVVV and TSRA Trade Comparison

When I scan for gapping stocks in the morning, I’m always looking for one of my favorite trading patterns. Today, EVVV - ev3, Inc., and TSRA - Tessera Technologies Inc., had the characteristics for this trade setup, and immediately went on the watch list. Here’s how the trades played out.

EVVV closed at the low Friday. A gap over the 50dma would catch those short, or previous sellers, on the wrong side of the trade. In this case, I liked that there was a trading pattern, a gap over the 50dma, and a close target…the 200dma.

My entry on this trading pattern is usually going to be taken over the 5-minute high. A stop is placed below the day’s low. I’ll take a 1/3 profits, and move the stop to breakeven within a few green bars, if the stock is gapping into previous supply. You can see resistance from June. Then it’s a matter of selling partials with trailing stops, and holding to a target.

It was basically the same trading plan with TSRA. Here’s a case where the stock stopped out breakeven. You never know if the trade is going to run. You just have to take the trade.

A quick drop stopped this stock short. I didn’t care for the 100% retracement from the day’s high, so left the stock alone after that.

Tomorrow, I’ll look for this trading pattern again, and take it when it triggers.