I promised an analysis of what went on behind the trade so here it is..
At The Stealthy Trader we actively watch the markets..this is the #1 requirement to be successful at trading..lol
#2 might be doing the proper detective work in the evening or early morning before the market opens. I can't relay how important it is to have a bullpen of potential candidates.
#3 Obviously GRPN was expected to get hit hard on the open after the market didn't like their earnings. It's a good habit to follow such scenarios(I said follow, not automatically jump in and catch the falling knife).
#4 Dedicate a piece of your trading screen real estate to stalk plays like this one.
#5 Watch patiently for signs of a rebound..such as the first candle on this 15 min chart which was very bullish as it opened on the low and rallied to close at the period high.
As a side note, we strongly suggest learning Candlestick Charting, in addition to a bunch of other relevant indicators..Something we can teach you!
#6 But we don't usually get involved until the 3rd or 4th 15 min candle(so between 10:15 - 10:45 AM EST).
Net net, with the help of our proprietary filters, we went from interest to action during the 3rd candle. The break-out above the $5.95 level only confirmed our trade not to mention the breakout yet again later in the day after it drifted lower..that one kept us in the trade for the remainder of the day..that and the fact that our proprietary filters were going haywire..lol
See the bottom chart for some insights behind our decision to exit at $6.21..so far a wise decision.
Deciding on exits and taking profits is a tricky proposition. It's important to consider many variables when doing so. Here at the Stealthy Trader, we're known for our Units Methodology which more or less translates to hitting singles and doubles while keeping some skin in the game for the potential year making Grand Slam.
However, in this case, you have a market environment that's turning negative, to say the least, in addition to a stock that just got slammed.
We wisely decided to take our profits now and stalk this one for new opportunities in upcoming sessions.
Hopefully this post gives some new insights, and yet another way to consider trading, to the many traders and investors trying to make a go at this very challenging business.
If you sense that our trading style might be one that you'd like to incorporate, reach out to me, ST, at either of the contact options below and I'll tell you about our new Trader Mentor program.
It takes many years of what can be painful experience to arrive at the point where your treating his like a business and accumulating wealth. This is definitely one of those situations where paying for a shortened path is the only way to go.
That being said, if your interest in the markets is to pull out of it more than the .05% offered in savings accounts and you don't have the time availability to run through the above steps multiple times a day for what could be thousands of stocks; then perhaps like many, either our Premium or Follow Trade Memberships is the perfect call for you.
And lastly, I prefer markets like this for long trades rather than what we had experienced for the past number of months...grinding higher trade.
Now would be the ideal time to join us and Earn while you Learn!