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.

It’s options expiration, and two bellwether stocks are beginning the day in the red. MSFT could open below it’s nice green bar yesterday, and GOOG - Google Inc. is taking a nasty hit after it’s earnings report. Not sure if I’ll try MSFT - Microsoft Corporation for a trade, but GOOG could be volatile enough for some action. 509.76 is the current 50dma for Google stock. That should act as a first support level.

I ended yesterday keep the QID long trade. Trading activity was slow enough for me to watch it. Probably not the best idea to not follow a stop, but I’ve seen so often, stocks drop .50 below my stop, only to reverse, and not look back.

It will be interesting to see the market action next week after options expiration is over.