{"id":5393,"date":"2010-06-17T17:32:47","date_gmt":"2010-06-17T21:32:47","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=5393"},"modified":"2023-04-27T10:14:46","modified_gmt":"2023-04-27T14:14:46","slug":"an-intraday-reversal-bp","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/an-intraday-reversal-bp","title":{"rendered":"An Intraday Reversal (BP)"},"content":{"rendered":"

Tuesday night news hit that a government investigation determined that BP had been spilling closer to 60,000 barrels a day in the Gulf instead of the 35,000 previously thought. This same night President Obama delivered harsh words for BP during his presidential address. The news was very negative for BP heading into today’s session.<\/p>\n

I started a short position after the news broke on the increased spillage findings. \u00a0 And I held this position overnight. \u00a0I walked into another $1.50 in downside with BP as it opened near 30.<\/p>\n

First BP traded lower. But at 29.70 the bid would not drop. \u00a0BP found the whole number. Then came back towards the low but could not drop 29.75. There was so much buying on the tape in this 29.75-70 area.<\/p>\n

BP bounced off of this open support and found 30.50. BP came back to test this area and held again. It did so a few more times. But then BP started to consolidate towards the low.<\/p>\n

Finally BP broke below 29.70 and I hit 3k shares to get short. This would be the bottom. Let’s replay what happened and identify the reversal pattern.<\/p>\n

Below 29.70 BP ticked to 29.60. Bids stopped getting hit at 60c. Not much of a downmove below such an important level for a Stock In Play. A bid stepped up to 66c and this bid was held. BP cleared 70c pretty easily. And then there was way too much buying on the bid at 71c and 72c and 73c. The 70c bid got hit once, but not that hard, and there was plenty of size on the bid left.
\n\"\"<\/a><\/p>\n

There are times when I advocate trading both sides of a stock. Meaning trading BP as a long above a certain level and short below the same level. I do not do this often. Only for special occasions with special stocks. And I am not much a fan for picking bottoms. But there are times for this. And Wednesday in BP was such a time.<\/p>\n

Long 29.71 was a play for the intraday trader. BP failed to breakdown. There was massive rebuying at this important 29.70ish level.<\/p>\n

This was your opportunity to start an Intraday Reversal Trade. You buy 29.71, your exit if the stop trades against you is if the 66c bid drops, and you hold for a Trade2Hold move to the upside. You cannot sell into the first upmove. You must hold. This play will not have a high win rate. The math will not work if you cannot hold for a substancial upmove. And this is challenging at the bottom. At the bottom stocks look their worst. Their is a crescendo affect that goes something like this: the stock looks awful, the stock looks weak, the stock is not strong, the stock is ok, the stock is good, the stock is great, the stock is awesome<\/em>. You are in the play to capture the stock is awesome<\/em> moves, perhaps multiple points higher.<\/p>\n

Later BP found 32. Granted the move from 31 to 32 was helped by the announcement that BP agreed to set aside $20B for those affected in the Gulf. This is an intraday reversal pattern. Perhaps you can make this trade your own.<\/p>\n","protected":false},"excerpt":{"rendered":"

Tuesday night news hit that a government investigation determined that BP had been spilling closer to 60,000 barrels a day in the Gulf instead of the 35,000 previously thought. This same night President Obama delivered harsh words for BP during his presidential address. The news was very negative for BP heading into today’s session. I started a short position after … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":5396,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,10],"tags":[495,1023,1101,239,1100,1039,30,349,18],"class_list":["post-5393","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-comments-2","category-mike-bellafiore-bellas-blogs","tag-an","tag-bp","tag-gulf","tag-intraday","tag-intraday-reversal","tag-president-obama","tag-prop-trading","tag-reversal","tag-smb-capital"],"yoast_head":"\nAn Intraday Reversal (BP) | 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\/an-intraday-reversal-bp\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"An Intraday Reversal (BP) | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Tuesday night news hit that a government investigation determined that BP had been spilling closer to 60,000 barrels a day in the Gulf instead of the 35,000 previously thought. 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