+ Reply to Thread
Results 1 to 1 of 1
05-03-2012, 02:04 AM #1
Trade Review "how to play bullflag" Made 50% on SGOC on a daytrade using this setup
Here is a trade review on SGOC. We bought this stock in the 2.4s and 2.5s in anticpation of a breakout on the daily chart at 2.7. What we noticed last week was that low float stocks were in vogue and seemed to the only stocks that are moving. This particular setup is a continuation play on the prevous days breakout where we anticpate a 2ndary breakout.
I bought this in the 2.43 spot right in the morning as the early morning weakness in the stock was bought.
In momo stocks often what happens is if the stock does not gap up after a huge runup the previous day you will see very quick and heavy profit taking into the open. Also aggressive short sellers will pile in thinking the previous days run was a pump job. As the stock starts to dip though it gets supported as buyers emerge as the stock is now at a discount. Often the traders who missed the previous days move will jump in hoping the stock can rebound and go on another run. Most traders never really care about losses but they hate that feeling of getting left out. Missing a big run so if they get a chance after missing such a run when they see weakness they will come and support the stock. Once the stock stabilizes and it becomes obvious that the stock is not going to fade the momo/daytraders like me will rush into the stock and push it to new highs.
We added this stock at 2.43 and 2.51
Sold 1/2 at 2.94
sold 1/4 at 3.50
Then added back a full positon at 3.3 and sold that postion along with the 1/4 position held previously in the 3.6s