Our firm did a great job establishing a core position in HIG yesterday. GMan was grinding it out in HIG during the lunch hours. Numerous times he was long waiting for HIG to break above 11.50 and it just couldn’t. And then HIG would return to 11. Looking at the intraday chart a new trader might have concluded that HIG was just trading in a range. But GMan sensed from his trading skills that HIG was likely to break out.
So he kept with HIG. And I could hear his frustration at times, “Let’s go already HIGGY.” GMan called out that we all ought to watch HIG. That it was getting ready to break to the upside. It did. And most on the desk made huge chops holding a core above 11.50. GMan went from negative to well over 3k very quickly.
HIG was not the greatest day trading stock. It was difficult to trade around your core. HIG was more of a position stock. When we spot a huge intraday level like 11.50 in HIG, and the stock is IN Play, our traders will hold a core from 11.50. If HIG trades below 11.50 then they will exit. But this is a Trade to Hold. We do not sell until we see a Reason to Sell. The stock must clearly show us its weakness. I added size around my core as the stock traded higher and padded my gains.
When a stock is in play it is not likely to just trade in a range from 11-11.50. We watch HIG like a hawk because most likely HG will either break down below 11 or break out above 11.50. This is one of the advantages to trading a stock in play. The stock eventually will really move. And you can see that HIG did. This cheap stock moved cleanly 1.5 points above the intraday resistance level, 11.50.
HIG was slow. I was surprised that it did not close higher. It appeared to have more legs than just 13. When HIG traded above 12.95 into the Close, which had become a new intraday resistance level, I thought we would see another explosive move up. We didn’t. And when 12.99 showed weakness I exited most of my position.
I held my core position until the Close. I suppose I could have made another 50c if I had exited HIG near 13. But this was a Trade to Hold. And I never spotted enough selling to exit my core from 11.50. I never spotted a Reason to Sell. Before the bell I sold HIG at 12.57. Chop! I will set alerts for 13 and 11.50 on Monday.
And btw GMan did not skip lunch. Apparently our desk thinks lunch ought to start at 11:15. I am certain G and Connor are responsible for this. I swear I can hear them chirping what’s for lunch at 11.
Really good stuff by GMan pulling the desk up on Friday. Very nice job by SMB making chops in HIG yesterday.
Enjoy your weekend.
