A quick note on an error I made this morning in our AM Meeting. We begin the meeting with an overview of the market and then discuss stocks with fresh news. During earnings season there are a ton of stocks with fresh news so I try to limit it to five names. Stock number six on my list was MMR. It was gapping down in the pre-market below 18 Where it broke out from a couple of weeks ago. One of my favorite setups is seeing how a stock will react when it gaps above or below a key breakout price.
After the market opened MMR traded up to 18 three times. After 18 failed to lift on the third occasion large selling came in and drove it down almost two points. Remember this setup as we move forward during earnings season. If you spot a stock gapping away from a recent breakout price make sure you set alerts if it returns to that price. It is a high probability trade with an excellent risk/reward ratio.
3 Comments on “A Missed Opportunity”
Thanks.Great info!
Those are some sharp rallies on the 7th and 8th,so It doesn’t surprise me to see a sizable downward correction, especially looking at the technical set-up (three seems to be a magic number). After the massive gap-up in Google and several days of relative stability at those higher prices I’m looking forward to a similar downtrend.
For the sake of your international followers, may I ask that baseball references be kept to a minimum. 🙂