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<\/p>\n","protected":false},"excerpt":{"rendered":"I was involved in quite a few stocks this morning.\u00a0 Alerts were popping up left and right as the market was selling off.\u00a0 Part of my job as a trader is to quickly decide if an alert is important enough for me to stop watching my primary trading stock.\u00a0 At 9:51AM I received an alert that FCX had touched 82.54.\u00a0 I punched it up but couldn’t determine why I had set an alert for that price (not good-I always remind new traders to be aware of the reason they set a particular alert).\u00a0 So I re focused my attention on CVS which had just pulled back after an explosive up move.<\/p>\n
CVS looked great on the daily chart as a long set up and the explosive up move right on the Open caught my attention.\u00a0 A bread and butter play on our desk is getting long stocks that have strong opening drives once they have had a chance to pull back and consolidate.\u00a0 But this is not the stock I am interested in discussing right now.\u00a0 Back to FCX.<\/p>\n
On Friday November 13 FCX had gapped up almost two points from its Thursday closing price.\u00a0 As it is currently one of the strongest stocks in the market I was interested in getting long if it pulled back right on the Open due to some profit taking.\u00a0 I did not think it had much of a chance of going negative for the day so I was looking for another level where there might be some interested buyer to support the stock.\u00a0 I used the previous day’s high of 82.54 as a price that I would be interested in getting long if it pulled back.\u00a0 I liked this price for three reasons:<\/p>\n
1) It was Thursday afternoon’s high so I knew that it would most likely serve as support<\/p>\n
2) It was 50% below Friday’s Open and Thursday’s close so is a perfect retracement amount for all the technical trader types out there<\/p>\n
3) It was very close to a support area from Wednesday November 11th<\/p>\n
FCX never pulled back to 82.54 on Friday.\u00a0 It ended up being a gap and go play as it drove to 85.\u00a0 But with this morning’s weakness in the market FCX caught some downside momentum and touched 82.50.\u00a0 The first time it hit that level it bounced less than one point.\u00a0 As a trader it is my job to review all of the stocks I am following at 11:00AM to see how they traded on the Open.\u00a0 I failed to do that for FCX.\u00a0 If I had I would have seen that it had bounced right off of a significant price level and would have set an alert for that level in case it touched it again.<\/p>\n
Armed with a price alert I would have caught the second up move which was about 1.5 points.\u00a0 That is a very easy setup that even the least experienced trader on our desk could have crushed it.\u00a0 Most stocks don’t touch a level exactly then have a complete reversal.\u00a0 Usually there is some HFT shenanigans that gets everyone’s stops to be triggered then the up move begins.\u00a0 But FCX is so strong that the buyers don’t have the time or compunction to let their buy prices be violated.\u00a0 They are just gonna buy at key support levels until the stock moves up to a higher range.<\/p>\n
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