{"id":248,"date":"2008-12-09T22:19:31","date_gmt":"2008-12-10T03:19:31","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=248"},"modified":"2023-04-10T17:11:32","modified_gmt":"2023-04-10T21:11:32","slug":"fcx-revisited","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/fcx-revisited","title":{"rendered":"FCX Revisited"},"content":{"rendered":"

One of the most important attributes of a trader is the ability to quickly change your bias in a stock.\u00a0 This mental skill is paramount for an intraday trader.\u00a0 In today\u2019s market, a stock is likely to reverse its trend multiple times each day.\u00a0 A stock that is very strong one day will be very weak the next.\u00a0 It is essential to recognize these changes quickly.<\/span><\/p>\n

Our desk has been actively trading FCX for the past week. FCX caught our attention when it canceled a previously announced dividend.\u00a0 That is very bad news.\u00a0 That is the type of news that can really kill a stock but at a minimum will put the stock In Play.\u00a0 The key level from that day was 17.\u00a0 There was a lot of buying at 17 and just above this level.\u00a0 FCX rallied strongly into the close off of this level.<\/span><\/p>\n

The following day FCX was discussed in our SMB AM Meeting<\/a> as a Second Day Play and as a stock that had potentially<\/strong> bottomed.\u00a0 You can see from the long term chart that in only a few months FCX has dropped from above 80 to under 20.\u00a0 Now that it was on our radar we were looking for evidence of a possible bottom or whether it would continue lower.\u00a0 One of the simplest ways to identify a longer term change in direction of a stock is to observe how it reacts to news.\u00a0 In the case of FCX after the dividend suspension the stock gapped down several points.\u00a0 But it didn\u2019t close near its low and rallied that day into the close.<\/span><\/p>\n

We were looking to buy strength in FCX above 18.25 or into a pullback close to the prior day\u2019s support at 17.\u00a0 If FCX traded forcefully below 17 then we would change our bias to the short side.\u00a0 I was able to make money trading FCX from the long side that day by following the above strategy.<\/span><\/p>\n

The next day FCX dropped the 17 bid and my bias was short.\u00a0 FCX traded down to 16 and at one point seemed that it might trade significantly lower.\u00a0 But as the market rallied in the afternoon FCX crept higher.\u00a0 I still had a short bias because it was below 17 and its Up Moves weren\u2019t as impressive as the market\u2019s afternoon rally.\u00a0 I actually held a small short position over the weekend.<\/span><\/p>\n

On Monday morning FCX was up $1.50 during premarket trading and showing signs of strength above 18.50.\u00a0 At that point I covered my short as my bias had changed to trading FCX from the long side again.\u00a0 A key level after the market opened for me was 18.80 a level that FCX struggled to stay above the previous Thursday.\u00a0 After the market opened FCX popped to 19.40.\u00a0 This was further confirmation to me of my long bias.\u00a0 At that point I was hoping for a pullback to 19 for a safer entry point.\u00a0 And I actually held out hope for a move to 18.80 where I expected strong support.<\/span><\/p>\n

FCX pulled back to 18.80 and I got long.\u00a0 When it rallied above 19.40 I bought more.\u00a0 I was able to catch a one point up move over the next few minutes. Chop!\u00a0 I was traveling for the rest of the day so my sale at 20.45 was my final trade for the day.\u00a0 It is clear from yesterday\u2019s and today\u2019s price action that a close above 21 would be bullish for the stock.<\/span><\/p>\n

I don\u2019t really care whether 16 was the bottom in FCX.\u00a0 My bias will always change based on its price action and trading volume.\u00a0 I will make money trading FCX whether it continues higher to 25 or goes back down to 16 or lower.\u00a0 That is why I love my job.<\/span><\/p>\n

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

\"FCX<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

One of the most important attributes of a trader is the ability to quickly change your bias in a stock.\u00a0 This mental skill is paramount for an intraday trader.\u00a0 In today\u2019s market, a stock is likely to reverse its trend multiple times each day.\u00a0 A stock that is very strong one day will be very weak the next.\u00a0 It is … Read More<\/a><\/p>\n","protected":false},"author":143,"featured_media":250,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[4676,196,18],"class_list":["post-248","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-steven_spencer_steves_blogs","tag-day-trading","tag-fcx","tag-smb-capital"],"yoast_head":"\nFCX Revisited | 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\/fcx-revisited\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FCX Revisited | SMB Training\" \/>\n<meta property=\"og:description\" content=\"One of the most important attributes of a trader is the ability to quickly change your bias in a stock.\u00a0 This mental skill is paramount for an intraday trader.\u00a0 In today\u2019s market, a stock is likely to reverse its trend multiple times each day.\u00a0 A stock that is very strong one day will be very weak the next.\u00a0 It is ... 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