The below chart setups show my buy points for my long-side (i.e., buy to open, sell to close) trades entered up to July 10th 2011. As usual I am using Equivolume charts. More information on equivolume charts here.
CAMP
CAMP had a textbook breakout from a long trading range on July 1st. It formed a “big box” day with huge volume and huge range that day. It continued higher over the next 2 weeks, without really having a significant down day. It was the only one of my longs that held strong through the market down days of July 8th, 11th and 12th. On July 14th however, as the market rallied in the morning, CAMP did not join the rally and instead was drifting at the same price levels. Seeing that the move looks exhausted, I raised the stop loss to $3.85, looking to get out at any sign of weakness. The stop was hit the same day as CAMP declined to an intraday low of $3.64
EZPW
EZPW had a breakout through the highs of an ascending triangle formation. Note the “big box” on June 27th, and the breakaway gap between June 26th (the very small box) and June 27th (the big and tall blue box). I bought it near the highs of the day on the 27th, but luckily it gapped the next day again so it never even came near my buy price. With a series of ever higher stops I was able to ride the entire move, until my latest stop of $37.95 was hit and I was sold at $37.84. Not a great fill after the stop was triggered, but a minor problem considering how great the trade worked out.
MOBI
After a long decline MOBI finally started moving higher in mid-June on good volume. The little rally peaked on June 24th, but the subsequent pullback was on very small volume (see Base area), which alerted me that the investors’ bias had changed and the trend was now upwards. My thoughts were confirmed on July 6th when the price formed a “big box” and punched through the recent high of June 24th. The next day, July 7th, the price gapped higher and immediately after the open exploded nearly reaching $12.00 within minutes (at that point I was up over 20% from my buy point). But this incredible gain was not sustained as the price reversed for the rest of the day, hitting my stop loss at $10.50. Although I made over 14% on that trade, I could have traded it better and taken profits at a higher level. The very small base (see chart above) and the incredible advance in just 2 days made it clear that the move was to be short lived.
TNAV
TNAV broke out of a cup-with-handle formation, forming a “big box” on June 6th. My stop at $19.75 was hit the next morning, as the price dropped to $19.40. In retrospect my stop was probably too high, but I would have probably been stopped out the next day – July 8th, when the price initially went even lower than the 7th’s low of day. Likely, I erred on the side of caution, but given a similar situation, I’d probably take the same action.
