{"id":18140,"date":"2012-03-29T13:24:19","date_gmt":"2012-03-29T17:24:19","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=18140"},"modified":"2012-03-29T13:24:19","modified_gmt":"2012-03-29T17:24:19","slug":"i-see-momentum-buying","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/i-see-momentum-buying","title":{"rendered":"I See Momentum Buying"},"content":{"rendered":"

I settled at my trading station wondering what to trade on this Open.\u00a0 RHT? BBY? AMLN?\u00a0 There had not yet been a price spike on the SMB Radar in health care yet but I would later ask what and where to buy for that sector.\u00a0 BBY showed some consistent selling at 25 so I scalped that down to 24.60 on small size.\u00a0 What to trade?\u00a0 What to trade?<\/p>\n

I loved the AMLN Second Day Play near 23, an important level from yesterday.\u00a0 Yesterday AMLN was In Play, could not get above 23, and then did with a nice push in the closing hour.\u00a0 A pullback to near 23 was an A+ Second Day Play.\u00a0 I placed a bid at 23.03 and just missed a fill.\u00a0 AMLN touched every price save my bid.\u00a0 I had that feeling that I am not a part of the market place.\u00a0 Later I bought 23.38 and am just holding now.<\/p>\n

RHT was the real winner of the Open.\u00a0 I found a way in.\u00a0 At one point I was the only one long RHT in our firm and annoyed asked,”Can anyone please tell me why you are not in RHT?”\u00a0 Then I tweeted:<\/p>\n

\n
smbcapital <\/a><\/p>\n
if you are an intraday trader and not in RHT<\/a><\/div>\n
today you ought to ask why<\/div>\n<\/div>\n<\/blockquote>\n

I saw momentum buying in RHT this open.\u00a0 Offers were sprayed.\u00a0 This is an unusual sight on the tape in these market conditions.\u00a0 Usually funds and institutions have passive buy algos to accumulate stock.\u00a0 They place a bid and wait to get hit.\u00a0 If they don’t then they pay the offer and slowly step higher.\u00a0 They wait to get hit on the bid and if they can’t then they pay the offer.\u00a0 On this Open in RHT I saw “old school” sloppy buying.\u00a0 I saw momentum buying.<\/p>\n

Momentum traders find a good story, in a strong stock, that is acting well and drive it higher.\u00a0 The trade works until it doesn’t.\u00a0 But the idea is for the momo traders to control the stock higher so it can exit at much higher levels for a solid gain.\u00a0 They are not that concerned with price at a given moment.\u00a0 58 is bought because 57.80 was bought.\u00a0 58.50 was bought because 58.30 was bought.<\/p>\n

Where to get in can be challenging when a stock gaps and goes.\u00a0 I was asked on the stream where to buy RHT this open.\u00a0 I responded:<\/p>\n

\n
smbcapital <\/a>@ALSITRADER<\/a><\/p>\n
i am not helping you as a trader by giving you the entry or exit for<\/div>\n
\"\"RHT<\/a> that is up to U and Your trading style<\/div>\n<\/div>\n<\/blockquote>\n

The pattern I have noticed throughout my trading years is that when you see this type of sloppy buying on Day One, the day of a significant news release, there can be substantial follow through.\u00a0 You remember back to when you thought the buys at 58 were hyperbolic and shake your head that you are not longer at 68 a few days later.<\/p>\n

This is not a call that RHT will trade higher.\u00a0 That is not my game.\u00a0 1) This is a hint to take notice when you see sloppy buying during an intraday.\u00a0 There is much upside intraday when you see such a buying pattern like in RHT on today’s open.\u00a0 2) Keep an eye on RHT for the next several days.\u00a0 If you can find excellent risk\/reward opportunities, 58.60?, there may be a swing trade to consider based on your trading style.\u00a0 3) These plays can end badly.\u00a0 So for those who fade this also ought to be on your radar.<\/p>\n

I am not sure where RHT is heading over the next 3 days.\u00a0 But I am interested.\u00a0 It has brought opportunity and with a pattern that historically breeds further opportunity.\u00a0 And on both sides.\u00a0 I see momentum buying.<\/p>\n

\n

\"\"<\/a><\/p>\n

\"\"<\/a><\/p>\n<\/blockquote>\n

Bella<\/p>\n

One Good Trade<\/a><\/p>\n

\"\"<\/a><\/p>\n

long AMLN
\nlong RHT<\/p>\n

no other relevant positions<\/p>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

I settled at my trading station wondering what to trade on this Open.\u00a0 RHT? BBY? AMLN?\u00a0 There had not yet been a price spike on the SMB Radar in health care yet but I would later ask what and where to buy for that sector.\u00a0 BBY showed some consistent selling at 25 so I scalped that down to 24.60 on … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[162,1990,30,81,1828,1193,653,301,1996,1354,1349],"class_list":["post-18140","post","type-post","status-publish","format-standard","hentry","category-general-comments-2","tag-day-trading-blog","tag-day-trading-class","tag-prop-trading","tag-smb-training","tag-smbu","tag-trader-education","tag-trader-training","tag-trading-blog","tag-trading-class","tag-trading-coach","tag-trading-mentor","no-post-thumbnail"],"yoast_head":"\nI See Momentum Buying | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/i-see-momentum-buying\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"I See Momentum Buying | SMB Training\" \/>\n<meta property=\"og:description\" content=\"I settled at my trading station wondering what to trade on this Open.\u00a0 RHT? BBY? AMLN?\u00a0 There had not yet been a price spike on the SMB Radar in health care yet but I would later ask what and where to buy for that sector.\u00a0 BBY showed some consistent selling at 25 so I scalped that down to 24.60 on ... 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