What happens when you are late to the party??? pic of champagne and party favors??
$TECD was one of the stocks I was asked to look at in my breakout session today. I started by looking at a daily chart and really liked what I saw. I saw a nice healthy pattern of higher highs and higher lows which was a bullish factor.
I also saw that the most recent decline into the 11/11 low was very similar to some prior corrective declines. Actually, it was almost the same as a prior decline of $14.60, with the recent decline coming in at $14.63. This is illustrated on the chart below.
My subscriber wanted me to set up an entry for them on the buy side. The only problem was that the TRADE SETUP zone had already triggered an entry a while back on the 30-minute chart and we have already seen a nice healthy rally after that buy trigger fired off!! I told them that they were late to the party and if we bought here, we would not have the edge in the trade. If we had taken the original triggers from last week however, he would have been in good shape!!
I have included 3 example of buy TRIGGERS against the original buy setup zone below. One is the RAF trigger by David Starr, one is the typical Squeeze trigger that John Carter likes to use and the third is the typical moving average crossover that I have subscribers look at (8/34 EMA crossover along with taking out a prior swing high).
So what is a trader to do if they get to the party late???
Well the first thing I have to see is if there is still potential for this stock to go even higher. The first target I have for this trade says YES. It comes in at the 1.272 extension at the 92.68 area. Price is currently around 82.67. I still can not recommend buying new highs for an entry however, so this is what I told them. We need to set up the next pullback, once we start to see one!! This means that I will run new retracements, extensions and projections from a new high after it starts to trade off. I told them I can not RUN a pullback until the market cooperates and gives us one!! That will set up an area I can focus on for a secondary entry. Hopefully from there we see a renewed buy triggers and then we see the rally resumes from there. Ideally it will resume and then take us to target 1 from the original setup.
Bottom line, it’s ok if you are LATE to the party…..as long as there are no signs of it ending anytime soon. I’m going to be stalking a pullback in the next few sessions back to the recent lows. If I do see another buy trigger after this pullback I will enter the trade and define my risk either below the pullback zone, below the low made prior to a buy trigger, or below the setup low. I’ll make that decision as far as the stop after I see what kind of pullback we see!
Moving average crossover trigger 8/34 EMA along with taking out the prior swing high made at 77.13