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Thursday, January 14, 2016

SBUX the green short trade and why



I was watching these for shorting  mostly 



 SBUX  has engulfing daily candle after several days in uptrend.
Resistance above is intact trading below the 20 down slopping SMA
SBUX
SBUX
SBUX 2 min bar reversal 



Being with engulfing daily candle, opened below the 200 and below the 20 SMAs  intraday, I shorted against the overhead resistance 58.00 covering on the way down to 57 where it had  inside narrow 2min candle with bottoming tail where I covered and took  a small scalp long for 29 c gain ( wish I kept it longer ,  but hey,, ). . That time SPY made higher lows , being severally oversold on daily and soon  after SPY took the PDL and went red to green , signaling bull's domination. 

SPY

When SPY failed to stay above 191.00, which was 50% re-tracement on daily, aslo at 200 SMA on intra-day 2min frame and made lower lows and highs ( 3 confluent factors )  I took second short SBUX, all per plan at 58.25 area . I was expecting lower highs but It consolidated nicely,making higher lows ( signaling Long possible entry ) so I limited my risk at above 58.50 risking 25-30 cents
It did not have more confluences like the  SPY but had a plan on low risk and sticked to it.


SNDK

Similar to the SBUX reversal candle at LOD, SNDK formed narrow red candle at top of the day after a nice run. Took the short trade at the break down of that candle 74.01 with tight risk above at only 13 c to make 30 c or more . It was a great trade  ( loser but great ) because I obeyed the stop risk and I did it per plan. No mistakes, no blaming other factors.  Speaking in hindsight if I was long SBUX based upon the  same reversal candle rule, after being oversold far below 20 sma ,  just like SNDK is overbought, with such great  risk reward,  it was going   to be  great long trade giving way more gain then just 1;3 R:R.  Same goes (in hindsight) for AAPL . If shorted the same red candle on HOD after being well overextended would have given nice R:R trade
How much I saved by getting stopped correctly



AAPL 
 reversal narrow candle break down with nice R:R 


Will  update more in details about how to act upon price action and ignore any personal opinion I may have

AngelDan@DaChopa





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