Hi traders,
In this post, I wanted to share some of my trades along with a commentary on why I had traded these stocks.
I will focus on one of the trades I made: APFC.
Reasons for entering the trade:
Here are the reasons that I had entered the stock.
1. If you look at the chart, the stock is in a steady uptrend.
This is a very good sign. It means that the stock is being accumulated by the big boys- hedge funds, banks, financial institutions.
Note that it retraced for some days, a few times, but went back up immediately. This shows that it is a strong stock.
2. At the time of purchase,
DreamTai trading software was showing that this stock had power ranking greater than 3, which implies that there was strong buying volume.
3. The stock broke out of a triangular wedge formation.
4. The stock broke out of 30, which is a round number. Usually round number offer resistance and stocks bounce down from the round numbers.
You notice that there was a confluence of two factors: A triangular wedge and the round number, both of which could push the stock down.
But the stock was so powerful that it pushed through both these and bounced up.
I bought 60 shares at $29.60 for this stock account.
Trade Management:
I have put a stop loss sell order for half of the position at $44.
And moving the stop order for the other half to breakeven..that is $29.60.
Why did I take $44? Because that is around 32.8% Fibonacci retracement from the bottom to peak.
What's next?
Who knows?.But as traders, we have to be prepared for anything.
Don't be in a hurry to sell and take profits. Let the stock take its own time to go up.
Hope this posting is helpful.
Sanjoy