The way I understand it, a bearish engulfing pattern (AKA key reversal day) acts as a reversal pattern in an uptrend. So based on that, I don't know if the candle from 1/23/6 would qualify.
Thanks. I hope you're right. Don't know how useful my opinion is but here goes- Nice uptrend, pull back to a support level on falling volume and a green candle today. However, I'd be wary of the strong selling shadow on today's candle and the (potentially) strong resistance zone between 90-91. So DNA looks strong, but I'm not sure how confident I'd be of 90+ within 5 days.
DNA pull up a daily (close) line chart and see if you note a small falling wedge-ish pattern e.g. 1/12-1/19-1/23-1/27? Will it be a reversal or a continuation --- being as it is sloping in the direction of the st trend?! I will look for DNA to trade somewhat further into the "apex" w/o breaking said support --- then have a resistance break higher with an objective of 91-93. just one possible scenario I am mindful of --- Ice
well-- there's ying AND yang - IF the stock (e.g. APOL) was moving lower - then we would be looking for a 'bullish" engulfing pattern. In fact since it ws moving lower by definition I believe - any engulfing pattern would be seen as bullish -- subject to confirmation. So on APOL - the 1/23/06 action was indeed a bullish engulfing pattern IMHO. e.g. "Engulfing Pattern - a reversal pattern that can be bearish or bullish depending upon whether it is in an uptrend or downtrend. The first day is characterized by a small body, followed by a day whose body completely engulfs the previous day's body " bonne chance Neoxx I will check in from time to time. Also feel free to post any ideas comments, etc. on my Journal. Ice p.s. no---- not all engulfing patterns are "key" reversals. What I was taught by instructors at CME was 1. look for significant volume increase and 2. look for confirmation thereafter.
Position Review SGP Aug 17.5 Call Stopped out for a 1.5% equity loss as todayâs action plunged through my stop at 19.4. Iâd been seeing this as a rising channel on the two-year daily chart and placed my stop just below the trendline and the recent lows. However, looking at the daily chart over the last nine months and it looks far more like a horizontal channel with a strong support at 19. Lesson? S/R on up/down sloping channels can be notoriously subjective, but horizontal S/R is easy to discern and agree upon. And after all, itâs the majority agreement that clinches it. Should I eliminate single-leg directional plays altogether? CELG Feb 65-70 ATM Bull put spread Moved up strongly, stopping just shy of 71. Resistance looming at 72. On a related note, Celgene present at the Merril Lynch conference next Tuesday, and there has been a spate of insider selling recently. Does this suggest that the 72 level wonât be breached? MO Mar 80-85 ITM Bull put spread Dropped like a stone on earningâs release and the potential interest rate rise. Iâve decided to hold both MO and QCOM until expiration, unless a profitable window intervenes. For a potential 1.5% loss of equity I can observe in real-time how ITM credit spreads respond to time decay and changes in the underlying. QCOM Feb 50-55 ITM Bull put spread Down today, but the 20 SMA is holding as support and what was a bull flag is metamorphosing into a hybrid ascending triangle. As the 20 SMA approaches 49, I envisage QCOM being stuck between a rock and a hard place. Hopefully, it will only be going up. SHLD Feb 125-130 ATM Bear call spread Closed this one today for a 33% return as it bounced off support at the 119.50-120 level(1.25% equity gain). Not bad for a 24-hour play! Was glued to the 5-minute chart as soon as I got home. Set a mental stop for 120.40 and closed as soon as this was breached. In the excitement, almost launched right into an ATM bear call spread! AAPL Feb 70-75 ATM Bull put spread Indecision. Spinning top at s/r. Challenged 76, sellers resisted. Challenged the 50 SMA, buyers resisted. What more to say? New positions? Bearish I still canât help but be bearish on APOL. While the bearish engulfing of yesterday lacked volume confirmation, todayâs unbalanced doji added weight to a drop. My brain refuses to recognize shorting opportunities! I canât find anything else. Bullish Few more for contemplation here. TXN still languishing at the rising trendline. A more concrete support level would be the mid-October lows. Iâm going long once it convinces me itâs rising. The following stock look promising for an ATM bull put spread once theyâve bounced off their respective support levels: SUN 90 MRVL 65 ESV 50 NEM 60 PAAS 20 And the following if they break through 30, pullback and bounce: RHAT RRC Away from Friday to Monday, and new job starts next Wednesday. Despite the several potentials, wondering if I should just be content with my current lotâ¦
Position Review CELG - tested resistance with a doji on the 5 minute chart, took my money off the table. 0.75% equity gain. (0.50 of a potential 1.60) AAPL - Falling volume, support holding but strong selling pressure towards top of support zone. I expect this to launch skyward once the 50 SMA gets closer. MO - riproaring marubazu, will see if it clears resistance tomorrow. I'm aiming to take profits at 77. QCOM - opened below the 20 SMA for the 1st time in a month, but closed above. Almost a bullish counterattack type pattern.
Yesterday, was trying to reconcile the risk/reward with OTM credit spreads. Today, suddenly possessed by the triggerhappy gunslinger and shot my way right into four OTM spreads. TXN 25-27.5 bull put (0.30 credit) ESV 40-45 bull put (0.70 credit) SHLD 100-105 bull put (0.45 credit) SHLD 135-140 bear call (0.55 credit) All March expiry. Maybe I just can't do things by halves! On a slightly different note, up until today I thought SHLD was a paramilitary/defence type organisation!