Why I Traded MCP Today
Mar 9th, 2012 | By sspencer | Category: General Comments, Steven Spencer (Steve's) Blogs, Technical Plays, Trader DevelopmentMy primary stock on the Open was GMCR. It is a classic momentum stock that had fresh news and a large pre-market gap. This type of setup is usually my #1 choice to trade on the Open if available. I have internalized the possible price patterns for this setup having traded it hundreds of times over the years.
My second choice was MCP a former high flyer that had announced they were buying a company in their space that would help them to vertically integrate their business. At least that is what it looked like in the article I read on Benzinga. MCP has been beaten down for the past year and was in a steady downtrend on pretty much every time frame. I thought that perhaps today’s gap up would be the beginning of a reversal of its daily and weekly downtrend. But if not there would be some money to be made on a gap fill.
Here is the video from our AM Meeting where I discussed which price action I would look for to determine whether to trade it long or short.
The bullish price action discussed in the video played out once the market opened so I got long. The annotated chart shows how I adjusted my trailing stops a few times during the day. I sold most of the position and will look to reload closer to 29.50 on Monday.
Steven Spencer is the co-founder of SMB Capital and SMB Training and has traded professionally for over 15 years. His email is sspencer@smbcap.com.
Steven Spencer is currently long MCP
*live trades discussed in this post took place in T3 Trading Group, LLC a CBSX broker dealer





























