It was a decent day for some trading opportunities, almost too many opportunities that it was hard to catch anything at the right time trying to follow so many different stocks. As well by mid day as we were up around 600 points i was skepticle to see the market continue higher. Yet i guess we can’t be surprised by anything in this current market environment.

Day Trading Stock Pick #1 - Long MS

MS always seems to treat me better than bad as i usually can pull a profit on this stock. Yet it is a dangerous stock as it can move so much so quickly on an extreme amount of volume. I picked up some shares and alerted our Black Service members to go long at 14.76 as price was consolidating in a nice looking ascending triangle pattern.

Note that you don’t want to go long on the first breakout of a stocks resistance as it usually leads to a false breakout. The 3rd breakout from a resistance point is the most reliable move to play. Not to say it always works because it doesn’t. But its the safest. Although secondary breakouts do happen as well as i was watching RRI today for a long position and missed it as it broke the secondary breakout point around 5.45 when i was waiting for a 3rd. So sure i missed that one, but trying to play secondary breakouts all the time and your pressing your luck. You will have a better success rate play the 3rd thus make winning trades more consistently.

I took profits shortly after on MS near $16 which was the current high of day area at the time for a solid 7%+ day trade. MS sold off and then continued on after that but in this hectic market i’m not looking to gamble and see what may happen towards the rest of the session. I’m in, I’m out, i made some scrilla!

Day Trading Stock Pick #2 - Short PNX

Second stock i attempted to tackle had a very high risk/reward ratio as PNX had traded up from 2.68 to just under $7/share in 2 trading sessions making a short with a tight stop very attractive here. Early in the morning it appeared momentum was in our favor for the bears as the gap up broke down and i went short at 6.40 and alerted Black Service Members.

Holding throughout the session it whipsawed up and down in a triangle formation until finally with the market becoming increasingly strong i decided to cover this position for small loss of just 2% before it could make significant damages to my MS day trade. This stock still has a very strong potential for a short later into this week but needed to cut my losses for now which turned out to be a very wise decision as it brokeout from its intraday triangle.

Tags: day trade, Day Trading, MS, PNX, stock pick, Technical Analysis

This entry was posted on Tuesday, October 14th, 2008 at 12:35 am and is filed under Day Trading, Small Cap Stock Picks, Technical Analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.