It is fun to see the desk trading so well the past few weeks. June was a tough month. July was much better. And this month is starting like August of 07. And that was a great month. Today we traded AIG, the home builders, and ETF’s. And AIG offered an excellent Trade2Hold that we should discuss.
AIG opened and quickly traded down a few points to 25. It started a range of between 24.90 and 25.10. Then AIG seemed to break out above….. Fake breakout. And then AIG appeared to breakdown below 24.90….. Fake breakdown. Greaaaaaat! That is always fun.
So I started the day getting caught in a fake break out and then a fake break down. But the day doesn’t end until 4PM so there was time to build a day. The nonsense of really just above 25 and below 25 continued some more.
But I hung in there. I kept my losses at a minimum. And then it came. The bullish flag was created. A gift from the trading gods had been delivered. I had a set up to crush.
What happened Bella? AIG finally made an explosive move above 25.30, intraday resistance, traded strongly on high volume to 25.75, and consolidated. As GMan would say,” It’s party time.”
AIG met resistance at 25.75 but really it was accumulating stock for its next upmove. AIG held above 25.75 finally and the stock started an uptrend to 29. This was a trade you must be in. Long above 25.75 as a Trade2Hold was the play.
Now with an AIG, a momentum stock, it is important to lighten up when you spot resistance. You never know when the buying will dissipate (anyone see the downmove from 29 to 26…….What the ARod?). But I held a core for most of this move, lightening up when I spotted unusual resistance. 27.50 was such a spot. Above 27.50 we reloaded. 28.95 was such a spot, which was a little fortunate as that nasty three point downmove was about to hit.
As intraday traders we must find set ups where we can hold for longer term moves. This is such a time. Learn this bullish flag pattern and add it to your quiver.
Best of luck with your trading! Don’t forget to follow us on Twitter!
7 Comments on “Trade2Hold AIG”
I was scalping the 25 calls right before this collapsed.. im glad i hit out when i spotted the options stalling… Lots of traders got stuck and couldn’t even exit at the bid it was crushed so hard… i like trading like this, its exciting.
I was scalping the 25 calls right before this collapsed.. im glad i hit out when i spotted the options stalling… Lots of traders got stuck and couldn’t even exit at the bid it was crushed so hard… i like trading like this, its exciting.
I was scalping the 25 calls right before this collapsed.. im glad i hit out when i spotted the options stalling… Lots of traders got stuck and couldn’t even exit at the bid it was crushed so hard… i like trading like this, its exciting.
Nice post. I got stopped out four times trying to catch that move. I entered at 25.15 and hit the bid near 24.8 each time. After four attempts I reached my loss limit. I could have executed better by bidding lower rather than paying up and getting shaken out each time. I’m not sure whether that would have been the best way to handle it. Perhaps I should have waited until the bid held above 25.30. In that case, I’m paying for the confirmation if it turns out to be another headfake.
Nice post. I got stopped out four times trying to catch that move. I entered at 25.15 and hit the bid near 24.8 each time. After four attempts I reached my loss limit. I could have executed better by bidding lower rather than paying up and getting shaken out each time. I’m not sure whether that would have been the best way to handle it. Perhaps I should have waited until the bid held above 25.30. In that case, I’m paying for the confirmation if it turns out to be another headfake.
Nice post. I got stopped out four times trying to catch that move. I entered at 25.15 and hit the bid near 24.8 each time. After four attempts I reached my loss limit. I could have executed better by bidding lower rather than paying up and getting shaken out each time. I’m not sure whether that would have been the best way to handle it. Perhaps I should have waited until the bid held above 25.30. In that case, I’m paying for the confirmation if it turns out to be another headfake.
Clint,
Do you have a platform that provides Level II quotes? Do you understand how to read the tape or simply use technical analysis?
It was clear from watching the Level II that a buyer was accumulaing using the flow ECN between 24.70 and 24.90. This type of info probably would have kept you long for the entire move.
Steve