IBM Pattern

BellaMike Bellafiore's (Bella's) Blogs6 Comments

I did not identify the pattern in IBM today until near the Close.   This soured my trading results.  The pattern in IBM today was to create a support level, hold that level with significant volume, trade higher from this support level, then drop, hold a level lower, and then explosively trade higher.  Basically IBM would not explode higher until its support level dropped.  I took rips on two of these drops.  But then I made an adjustment.  Let’s discuss.

IBM 101.50 held, traded up to 101.90 a bunch of times.  I bought 101.51 and kicked it out a bunch of times on the offer, 75c, 83c, etc.  I kept making the spread from the long side.  I kept a core long because IBM was in an uptrend.

Finally 101.50 dropped and I got flat and short.  101.35 stuck the bid, and then IBM squeezed back towards 101.90 quickly and painfully.  I missed the long and I was short.  Ripper.  

Then 101.35 would not drop.  I made the spread between 101.35 and 101.75 a bunch of times.  I held a core long position in front of 101.36 because IBM was still in an uptrend.  I made some nice chops.

SPY traded below 84.20 dragging the market lower.  IBM dropped the 101.35 bid.  I got flat and short.  101.21 held the bid.  IBM exploded.  I missed the long and took a rip short.

Intraday I recognized my mistake.  I did not identify the trading pattern with IBM initially.  If I would have made a small adjustment initially I would have killed IBM.  Instead I was only slightly positive.  Finally, I made an adjustment.  101.81 was support.  This level dropped and instead of flipping I got flat.  When 101.72 held the bid I got long again.  I held IBM into the close and sold at 102.27.  This was a profitable trade.  

101.85 is a nice level to trade off of for IBM tomorrow.  Best of luck with your trading.  Don’t forget to follow us on twitter.

IBM 04-21-09

6 Comments on “IBM Pattern”

  1. Great post Mike. Chalk-full of information that an astute trader can use to improve their trading.

  2. Great post Mike. Chalk-full of information that an astute trader can use to improve their trading.

  3. How do you pick your stocks to follow? The stock universe is huge, so do you pick the stock in play after an particular event (e.g earnings) or do you have a short list that you like to follow?
    Great blog

  4. How do you pick your stocks to follow? The stock universe is huge, so do you pick the stock in play after an particular event (e.g earnings) or do you have a short list that you like to follow?
    Great blog

  5. We trade stocks with fresh news or off of important intraday technical levels that we find.

  6. We trade stocks with fresh news or off of important intraday technical levels that we find.

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