Today, the Market appears set to open higher. The levels we are watching in the SPY are 135.60 – 135.80 (resistance), 135.00 (inflection), and 134.80 and 134.50 (support).
Our best AM Idea for today, which we highlighted in our AM Meeting is to get short BRCM between 37.25 – 37.40.
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3 Comments on “SMB Morning Rundown – April 27, 2011”
I noticed that BRCM gapped down to 36.63 at the open. Did you take the trade or won’t take it unless it retraces up to 37.25? Or did you get to hit it pre-market at a higher print?
G,
There was a seller in the prmkt at 37.25. That is why we liked that level.
When the market opens we watch the price action closely and will develop other trading plans that are aligned with our initial bias if the price action is confirming that bias. In the case of BRCM it continued to show weakness on the Open so I shorted it below 36.80 and covered my last lot at 35.84 and then tried to trade it for a bounce. When it failed to bounce above 36.20 I offered some shares to short there that eventually were taken so I was able to capture a good portion of the second down wave.
The great thing about an In Play stock like BRCM is there will generally be multiple opportunities to make good risk/reward trades throughout the day.
Steve
Very interesting Steve, thank you for replying…
When you say ‘trade it for a bounce’, do you mean you tried to get long on it if it printed above 36.20, or ‘bounce’ as in a secondary short at 36.20?
George