5/14/13: Plays

5/13/13: Plays
None

5/10/13: Plays
BKS

5/9/13: Plays
BBRY, SPWR

5/7/13: Plays
SNDK

5/6/13: Plays
None

5/3/13: Plays
CDNS, EXPE, PBI, MBI, AMD

5/2/13: Plays
None

5/1/13: Plays
PBI*

4/30/13: Plays
VSH, BBRY, SPN, GG, CHKP

4/29/13: Plays
SPN, SU, VSH*, MS*, SWY

4/26/13: Plays
JCP*, CPN, SPN, PMT, PHM, HRB, NR

4/25/13: Plays
ANGI, ARNA, SVM

4/24/13: Plays
BYD, CE

4/19/13: Plays
NPSP, DHI, COF, MNKD, JPM

4/18/13: Plays
AEM, BP, USO, UPL

Note: Some of my earlier annotations will have errors in them because I recently began (i.e. I was a newbie at the time.) tracking stocks using this strategy.

I'll continuously check them to make sure everything is in order.
9/20 EMA (5 minute) Strategy
Goal/Overview
Anticipating the bottom of the pullback and finding a precise entry and exit/stop.

How to Play
#1. There must be an uptrend. Cleaner (no rollercoaster candles) the better.

#2. A possible entry presents itself when a red candle (AKA Dip Candle) closes between the 9 and 20 EMA. It must not penetrate the 20 EMA. If it does, the play is invalidated. However, there is one exception (as of 5/1/13):
  • Let's pretend the 20 EMA is sitting at .80. Now let's say the candle pierces .80 and ends up closing somewhere around .75-.79. Normally I would look away. However, because .75 is mental support, I would continue to look at it. Please see the detailed example here with PBI. Another example using EXPE here. These will be in italic.

#3. A (buy) 'Trigger Candle' occurs when price goes above the 'Dip Candle'.

#4. The stop with be the 1c below the low of the Dip Candle. (The stop will move along with the 20EMA as time progresses. See #5. However, it's really about your risk tolerance and preference.)

#5. After +10 minutes, your stop will be the 20 EMA. The psychology is, "Bidders better be riding the 20 EMA. If the stock falls back down to the 20 EMA and no one is there to support it, I'm out."

Annotated Image Explained
#1. You will see two white arrows. The first arrow is the DIP CANDLE. This candle, should this become a play, will dictate the stop. (The stop will be .01 under this candle.)

#2. The second arrow is the TRIGGER CANDLE. This occurs when the price goes above the high of the DIP CANDLE. For example, if the DIP CANDLE'S high is 20.05, then your buy entry is 20.06.

#3. (For a Delayed Trigger Candle entry) The red arrow points to the candle which the stop will be based on.

Variation of the 9/20 EMA Strategy
  • The Delayed Trigger Candle. Not every 9/20 play will be on-point in providing you with a trigger candle immediately following the dip candle. Some may take an additional candle while others take 4-5 candles before giving you the trigger candle. (Example: MGM) The stop for this variation is based on the low of the candle prior to the trigger candle. (Denoted with a * next to the symbol.)

Videos
  • Part 1a: I explain how it works (dip candle and trigger candle).
  • Part 1b: I explain what invalidates the setup, how to identify the stop, and provide a couple of examples.
  • Part 2: Using Level 2 to determine how thick/thin a stock is. If a stock is thin, don't use the strategy on it. I did this during the market open so if I seem distracted that is why.
  • Part 3: The earlier (intraday) the opportunity to enter/trigger, the better. I also discuss why it's a bad idea to enter mid-afternoon even if the opportunity is there. (It's because it's already run and/or near HOD.)

Other Things to Keep In Mind
  • The best time to find these setups occur at 9:30-noon (EST). The logic is you want to get in on the first available opportunity. No doubt there can be second opportunity on a stock, but the longer the stock has run, the less potential for profit. In other words, nobody wants sloppy seconds.

  • Always check the daily chart (20/50/100SMA) to check where resistance is at. This will give you an idea of how far your stock can run (and when you should began exiting your position as it hits the brick wall).

  • Aside from the above, don't forget to factor in whole numbers and previous candles that serve as prior resist.

  • Check level 2 to see if there is a wall of any sort at your buy price. If there is, which is something I've spotted (sellers don't even attempt to hide it) recently, then place your buy 1c above it. Also use level 2 to determine if a stock is thin even if it trades millions in volume per day (e.g. FSLR). Don't mess with the thin stocks.

  • If there is a 5-10 minute delay before the trigger candle takes place, no problem. But the longer the stock goes sideways, the less interest you should have. (Just my personal preference.)

  • The higher price the stock the better. If you do this with a $5 stock, more-than-likely your entry will be near the HOD. Just isn't worth the time and not enough potential to run. I'm not saying it won't, you just want the reward on your side.