{"id":315,"date":"2009-01-18T10:35:19","date_gmt":"2009-01-18T15:35:19","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=315"},"modified":"2009-01-18T12:23:42","modified_gmt":"2009-01-18T17:23:42","slug":"buying-into-a-pullback","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/buying-into-a-pullback","title":{"rendered":"Buying into a Pullback"},"content":{"rendered":"<p><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2009\/01\/el-1-day-chart-1-16-09.bmp\" title=\"EL 1-day chart 1-16-09\"><\/a>EL was a good trading stock on Friday.\u00a0 EL traded between 24.60 and 25 for most of the Open.\u00a0 Then on higher intraday volume EL broke above its resistance level.\u00a0 EL traded up towards 26 and then stalled.\u00a0 Let&#8217;s discuss how to buy EL into a pullback.<\/p>\n<p>This is a stock I want to be long.\u00a0 It broke above intraday resistance.\u00a0 EL did so on higher volume.\u00a0 EL had a nice move above 25 to 26.\u00a0 And it was IN Play.\u00a0 The cosmetics company cut its earnings and sales outlooks for the fiscal second quarter and year, following a tough holiday season and continued weakness in consumer spending.\u00a0 But after EL stalled at 26 where do I buy more?<\/p>\n<p>It is a matter of trading preference as to where to buy EL into a pullback.\u00a0 But here are my levels.\u00a0 EL slowed at 25.60 and traded sideways.\u00a0 I got long.\u00a0 EL clearly traded below this level so this is a sale now.\u00a0 EL held the 25.35 level on the way up towards 26 so I got long again at 37c.\u00a0 This level did not hold and I got stopped out.\u00a0 The next level to buy into this pullback was in front of 22c.\u00a0 During EL&#8217;s first move above 25 25.22 would not drop the bid.\u00a0 I would have hit the bids if the 22c level dropped, but then bought in front of 25.<\/p>\n<p>EL held the 25.22ish level and then traded higher.\u00a0 EL traded back towards 26.\u00a0 So for me, for my buying into a pullback strategy, I would have been stopped out 2xs (small losses) but then caught a 75c upmove.\u00a0 Most specifically I will sell half of my position at 26, the new intraday resistance level, and then let the rest of my position run.\u00a0 If I see EL clearly hold above the new intraday resistance level of 26, then I will buy back some more.<\/p>\n<p>Each trader should develop their own strategy for buying into a pullback.\u00a0 I was bullish on EL after I saw the upmove above 25 on heavy intraday volume.\u00a0 So I was a buyer at 25.60, the first time EL slowed.\u00a0 Some traders might have found this too aggressive.\u00a0 Some traders are more aggressive than me and would have bought a pullback at 25.75.\u00a0 Others less aggressive may have waited until 25.37.\u00a0 Still others even more conservative would have waited until the 22c level.\u00a0 This is up to you.\u00a0 But what is important is to develop a <a href=\"http:\/\/www.smbtraining.com\">system<\/a>.\u00a0 What is necessary is to have a very good reason as to where you are buying into a pullback.\u00a0 And what is most important is that if that level does not hold you must exit, reevaluate, gather information, and consider your next level to buy.<\/p>\n<p>This is a play you want in your <a href=\"http:\/\/www.smbtraining.com\">trading arsenal<\/a>.\u00a0 You want to be in strong stocks and buy into pullbacks.\u00a0 And you want to hold a core of an EL until there is a reason to sell.<\/p>\n<p>Good luck with your trading.<\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2009\/01\/el-1-day-chart-1-16-09.bmp\" title=\"EL 1-day chart 1-16-09\"><img decoding=\"async\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2009\/01\/el-1-day-chart-1-16-09.bmp\" alt=\"EL 1-day chart 1-16-09\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>EL was a good trading stock on Friday.\u00a0 EL traded between 24.60 and 25 for most of the Open.\u00a0 Then on higher intraday volume EL broke above its resistance level.\u00a0 EL traded up towards 26 and then stalled.\u00a0 Let&#8217;s discuss how to buy EL into a pullback. This is a stock I want to be long.\u00a0 It broke above intraday &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/buying-into-a-pullback\" class=\"more-link\">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":[10],"tags":[4676,30,18],"class_list":["post-315","post","type-post","status-publish","format-standard","hentry","category-mike-bellafiore-bellas-blogs","tag-day-trading","tag-prop-trading","tag-smb-capital","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Buying into a Pullback | 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\/buying-into-a-pullback\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Buying into a Pullback | SMB Training\" \/>\n<meta property=\"og:description\" content=\"EL was a good trading stock on Friday.\u00a0 EL traded between 24.60 and 25 for most of the Open.\u00a0 Then on higher intraday volume EL broke above its resistance level.\u00a0 EL traded up towards 26 and then stalled.\u00a0 Let&#8217;s discuss how to buy EL into a pullback. This is a stock I want to be long.\u00a0 It broke above intraday ... Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.smbtraining.com\/blog\/buying-into-a-pullback\" \/>\n<meta property=\"og:site_name\" content=\"SMB Training Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/smbcap\/\" \/>\n<meta property=\"article:published_time\" content=\"2009-01-18T15:35:19+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2009-01-18T17:23:42+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2009\/01\/el-1-day-chart-1-16-09.bmp\" \/>\n<meta name=\"author\" content=\"Bella\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:site\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Bella\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta 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SMB Capital is an equity prop trading desk that trades on 5th Avenue in New York City. Mr. Bellafiore is a graduate of the University of Connecticut School of Law. 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