WFMI was In Play today.  It gapped down in the premarket on disappointing earnings results.  My first instinct was to look for a good level to get short as WFMI usually follows through on the direction of its gaps.  I had a downside target of 27 based on a longer term level.  What I needed was a safe entry point.  I noticed throughout the morning an offer couldn’t hold below 28.10.

As the lunch hour approached there was a spike in volume and WFMI quickly traded below 28.10 to 28.  The 28 bid dropped and it quickly traded down to the 27.80s.  The trading gods were kind to me offering an opportunity to get short as it quickly popped back to 28.  I was short below morning support with one point of downside to the next long term support level.

Eventually WFMI traded down to 27.10 where there was a ton of buying.  I knew based on my pre market prep that 27 was a major long term support level so it was time to cover and get long.  The buyer stepped up to 27.20 and we got long more.  WFMI had an explosive up move right before the Close to 27.40 and we thought that we had caught the bottom.  But it was to no avail as eventually WFMI dropped 27.10 and traded down to the 26.80s.  It was time to get out and reevaluate.

WFMI closed at 27.10 with a 72K share print.  I would expect it to make a large move off of this longer term level tomorrow.  A lot of volume was done in the final hour between 27 and 27.20.  WFMI has not closed below 27 since it gapped up on good earnings in August.  If we see the accumulation on the Open tomorrow we will look to buy as close to 27 as possible.  A move above 27.50 will be confirmation of a change and momentum and possible upside to 28.50.

If WFMI has a hard down move below 26.80 and holds below then I will look for an attempt for it to fill the gap down to 25.

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