Nasdaq Retracement and a Trade in TRA

The Visa IPO ended up a disapoint for me. My 5-minute chart caught a bad tick that made it unreadable. The first pullback was orderly on the 15-minute chart, but the candles were too large for me to get decent reward/risk. It happens. V will stay on my daily chart watch list for a setup.

After 10 bars higher on the Nasdaq 60 minute chart, it was due for a rest. Notice how the 200 ma stalled it. I love using that indicator as a target. So this pullback was a little more than I’d like, and a close on the low isn’t pretty. It’s options expiration week though. Crazy volatility can happen. Watch for a buy signal on the 60-min before going long. Oh, and I see that the bull-bear ratio now has almost 45% bears and just 31% bulls. I don’t ever remember seeing a spread like that. Bullish.

Here’s a short trade in TRA - Terra Industries where I used both the 60-minute and 5-minute charts. If you look at the 60-minute chart, TRA has overhead resistance in the 41 area. After heading 5 bars up it basically stayed range bound for 5 more bars. Let’s look closer. The candlestick at point 2 was bullish. In fact it was an outside bar. Bullish. Then there’s a little topping tail followed by an ugly bearish bar at point 3 that retraces 100% of that previous bullish bar at point 2. Red flag. That’s when I actually took a look at the stock.

I switched down to a 5-minute chart for entry. The stock broke down under 39.28. I waited to see how it handled the area. There was a little bounce which formed a lower high pivot which gave the signal to short. A stop was placed .25 abgove the green candlestick at point 1 to give a little jiggle room. 3/4 were covered for a point, as I wasn’t expecting such a bearish day.