daytrades april 21 pre-market, page-20

Not sure if this is of interest, but last night on my blog I posted a chart and some observations on the CAP chart, and thought I might share it here:



"I thought I'd use the CAP chart to help highlight how I personally like to trade news plays, and also to show some examples of how Fibonacci levels can give you some guidance in finding bounce levels.

CAP had news before open today, and gapped 7.5c on open. I very very rarely, if ever, chase gaps that large in news plays, but prefer to wait, and then look to take a position on either a) an intraday swing low or b) a break of the initial first 10-15 minute high after the news.

So CAP peaked at 31c odd in the first 15 minutes, and then proceeded to drift lower, importantly on lower volume, suggesting the sell pressure was weaker than earlier buying power.

So where could we expect it to bounce from that dip? Here's where the Fib's come in. Now, to be perfectly honest I didn't use the Fib levels on this chart early in the day, but if I had, and as you can see on the chart, CAP dipped pretty well perfectly to the 62% Fib line, and then ranged between there and the 38% Fib until around 2.00pm.

Then basically all hell broke loose! CAP formed the swing low on a break of about 27.5c, and on a massive increase in volume, and from there very quickly penetrated that initial intraday high of 31c.

I actually missed my swing entry and the 31c break (and I call myself a trader!), but was lucky enough to get filled on the small dip soon after. I traded it 3-4 times in the afternoon, locking profits into the spikes and then buying the dips. I haven't included them on this chart, but if you ran Fibs from each trough to high on the last 2 hours of CAP's chart, you'll find she dipped to very close to the 38% level every time. It gave a really close indication of where to look for the next entry.

Very few trades go as smoothly and according to the script as CAP today, but it provides a textbook example of some of these scalping techniques."