Opening Drive?  Mike is that some football term describing a team’s first possession?  No.  The Opening Drive is a play that momentum traders crush, leaving a huge grin on their face.  These traders in the first 15 minutes can make enough to ensure an awesome trading day.   We saw one today in HGSI on the Open.

I walked onto my trading floor, logged into briefing.com and found: Human Genome Sciences and GlaxoSmithKline announce positive results in second of two Ph. 3 trials of BENLYSTA in systemic lupus erythematosus.

I opened LightSpeed and  HGSI had gapped up 6 points.  Now for all those who wonder how we find a Stock In Play, I think you can handle things from here.  HGSI was a Stock In Play.

In the premarket 25.20 was an important level.  GMan mentioned this during our SMB AM Meeting.  Spencer added, “If HGSI can hold above 25.20 it could touch 26 and maybe 27.”

We opened and the typical above/below nonsense occurred that seems to have to happen in everything we trade.  HGSI could not trade below 24.80, or above 25.25.  Finally HGSI cleared 25.25.  The Opening Drive was in the room.

This is a play that you will see often.  Above 25.25 you get long, strap on your seat belt, and play the upside momentum.   I try and stay long until I see something different or the upmoves are not as powerful.  At 26.20 we saw on the tape HGSI change.  The selling was more pronounced.  I lighted up to 1/3 of a position.

After this move HGSI got more difficult.  There was a nice support play to be made when it traded down all the way to 25.  There was a shorting opportunity below 24.80, which worked well.  But there was also a ton of opportunity to accumulate small losses to dent your chop from the opening drive.  Staying away from these was important.

The opening drive takes some guts to stay in.  But this is a pattern to add to your playbook.

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