Monday was a powerful Gap & Go day exceeding the expectations of the setup walked through in Why the Market is Rallying This Morning.
Monday was a good day for traders, if you had a handful of setups on your long radar and pulled the trigger.
In fact, members of the Hit & Run Report & Private Twitter Feed who bought 500 shares of each of the following long ideas for Monday realized enough to pay for their subscription for the next decade.
First up is VUZI, which we’ve played several times this year.
We actually took VUZI long on Friday on an audible at 18 as it traced out two consecutive lower lows within the context of a strong uptrend… satisfying my Plus One/Minus Two buy pattern.
BMBL was a Hot IPO Pullback idea that we also bought on Friday.
Our average price was 68.52. We sold half for a 1.88 gain and half for a 4.48 gain in keeping with our Trim & Trail methodology to trim a position as it moves up and trail a protective stop and ring the cash register at resistance.
Rinse and Repeat. Wax on, wax off.
PLL was a long idea from the weekend Hit & Run Stock Report for Monday.
It showed superior relative strength on Friday’s decline being a green bean in a sea of red, leaving a Peekaboo New High Close buy signal.
PLL continued higher after coming out of a 5 month Cup & Handle.
Members sold half their PLL for a 3.70 gain and maintain the back half of the long swing.
APPS was a long setup for Monday, a Torpedo (damn the torpedoes, full steam ahead) on Friday, rallying 10 points out of its Bull Flag and setting it up for continuation on Monday.
The following 10 min APPS shows a Side Door Entry on Monday into the opening gap which was followed by an Opening Range Breakout.
Today, we’re zeroing in on our old friend FRSX.
The following daily FRSX shows a Combo long setup for Tuesday, a V-Thrust Pullback pattern and an Expansion Pivot.
An Expansion Pivot buy signal is a strategy I created in the 1990s which does a good job of identifying when a stock is ready to continue to the topside after a test of its 50 day line.
Notice that FRSX “flushed its 50” last week but tailed up, leaving a Lizard buy signal (a new 10 day low with the open and close at/near session highs).
FRSX rallied into an open gap and pulled back, retesting its 50 day line and putting it in a position to capitalize on Monday’s overall market move.
The takeaway is that once a stock gives a signal, it pays to stalk it over coming days.
The market is not a fine Swiss watch. Stocks don’t always “come out” of setups immediately.
Typically stocks crawl before they walk, walk before they run, and run before they sprint.
After big institutions accumulate patiently, they take offers promiscuously, driving a name higher.
That’s the name of the game.
Consequently, stocks often stutter step after an initial signal.
This is what FRSX did following last week's Bottoming Tail (Lizard) buy setup.
As legendary trader Jesse Livermore wrote, “After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting.”
There are a lot of smart traders on the street. There are not a lot of rich traders.
Brains alone don’t make the bottom line. It takes sitting and watching.
As I like to say, speculation is observation, pure and experiential. Thinking isn’t necessary and often just gets us in trouble.