Day trading can present some great opportunities. I posted yesterday about day trading a down market. Some days just have the potential to be very profitable for day traders. Here’s a brief overview of some specific day trades that could have been grabbed.
Research in Motion (RIMM)
RIMM opened well below yesterdays low. It made a very weak attempt to close the gap down from yesterday. When that failed, it was all down hill.
1. Arrow 1 shows where RIMM broke through its low of the day (LOD) here. It was a pretty easy short trade down to the whole number at 70.00
2. I like to target whole numbers as they tend to provide natural support/resistance. 70.00 was a logical target here,and the price blasted right through, making it easy to take half out of the trade and let the rest ride on to the next target.
3. Since I love whole numbers, the next logical target was 69.00. With a stop set up right above 70.00, you might have sweat it out a bit as it slowly faded back up, but the volume was weak, and this really wasn’t an authoritative move. After coming close to the 70.00 mark, it turned back around in our direction, and headed straight for target 3. Easy Money.
Goldman Sachs (GS)
GS actually made a valiant push up and through its gap. The pull of the stock market was too much for it though, and GS eventually succumbed to its strength.
1. GS presented trading opportunity as it comes around to its LOD. The stock market was just dragging everything down. Once GS hit its LOD, it was easy to pick a couple of targets.
2. You can see the Previous Day’s Low (PDL) indicated on the charts with a pink horizontal line. This was the first obvious target, and it cruised right down to it without a problem.
3. The next target I saw was the whole number at 141.00. The stock market kept pulling this one right down with little hesitation. No sweating it out here, just money in the bank.
Amazon (AMZN)
I saw a couple of trades on Amazon (AMZN). One closed for a small loss, the other was a solid gain.
1. The first trade came as AMZN approached its LOD at 81.00. This was paired with a whole number, and it seemed like a break of this line would make for a solid breakout.
2. After a few minutes of this stock not going anywhere, you have to take the loss as it pushes back above 81.00. I would want it to move to 80.00 a lot faster considering the momentum I would have expected it to have.
3. A second opportunity came as AMZN approached 80.00. The thing that made this trade interesting was that SPY was approaching the 90.00 mark at the same time. This trade became a highly probable win when AMZN broke 80.00 almost in unison with SPY breaking 90.00.
4. This trade proceeded without incident to the 79.00 for a first target. The next target would have been the next whole number, which AMZN never made it to. The second half of this trade was closed out when, within the next couple candles, the 5 minute candle closed above 79.00.
Apple (AAPL)
Apple (AAPL) was an interesting one. Even though it gapped up, I was watching it because of the news that broke about Steve Jobs over the weekend. I mention in my article “10 Ways To Build a Better Watch List” that company officer related news is something to watch for. Steve Jobs IS Apple (AAPL) and this news was sure to cause a reaction with the shareholders.
1. AAPL provided an opportunity early on when it broke 140.00.
2. It was a quick scalp shot down to the first target at the Previous Day’s High (PDH), indicated by the blue horizontal line on my charts.
3. Target two would have been 139.00, the next whole number. Apple didn’t want to go there yet, so it’s a close of the second half for a small loss.
4. A second entry point presents itself as the price breaks through the double-up of support/resistance at the PDH & Previous Day’s Close (PDC), indicated by the red horizontal line on my charts.
5. You know how I feel about whole numbers by now, and this one looked like it might not make it, but gave no real reason to exit. It finally pushes through 139.00 at this point.
6. Another double-up of the Previous Day’s Open (PDO) and the whole number at 138.00 looks like another great entry point.
7. A few minutes later AAPL proves that hunch wrong, and the trade is closed (if you were being super stubborn) where this arrow indicates.
This is just a brief overview of the type of trading I do on a day when the trend is clear. I don’t see a need to grind it out, just take the simple support/resistance trades.
Anyone take any money away from these stocks? How about one of the many other stocks that dropped like a rock yesterday? Let us know by leaving a comment!
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