Friday, July 30, 2010

Afternoon session + my entry strategy...

I like the early morning reversal and current sideways price action I am seeing in the market indexes. The rally this morning caused a few of the stocks on my watch list break through yesterday's high and cause the 10 period MA to cross above the 30 period MA on the 30-min chart. These stocks after creating lower highs and lower lows or channeling over the past three to four days have now established higher lows but higher highs have not been established as yet. What I am looking for now is for these stocks to break through this morning's high and therefore establish higher highs. If this happens I would like to put some units of risk into the close of trading. I am already long 100 shares of IGTE @ $17.50 but my stop loss on this position is extremely tight! So my risk is low. I have open orders to buy IDT and ISLN if they break above this morning's high which I anticipate will happen only if we get some sort of rally into the close.

I have adapted my entry strategies to suit current market conditions. What I have noticed is that many stocks pullback after breaking past the prior day's high (which is usually my entry point) but often rally powerfully going into the close. So I am looking to enter my swing positions by either buying pullbacks to the 30 day MA on the 30-min chart, after the stock has broken the prior day's high, early in the day or by buying breakouts above intra day resistance into the close.

Thats how I am dealing with the markets currently.

Good luck and good trading!

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