The Q's opened with a huge gap down today @ 78.72 and immediately set the low of the day @ 78.67 in an area of major support. Price then rallied hard into 10:30 am reversal time and set the high of the day @ 79.35. Price began to sell off into 1:00 pm to make a higher pivot low @ 78.83, then price rallied upward into 2:00 pm but falling way short of the high of the day before rolling over and heading lower. Price sold off hard into the close where we ended the day where we started 78.72.
QQQ 10072013
My play of the day came in TOL which I found on my gap down list. I put TOL on my gap down list but the stock did not even score using my gap scoring system. If a stock does not score, I treat it like it's a Tier III gap, which means that it has to do something special for me to trade it. Price action in TOL immediately filled the gap within the first 30 minutes, usually price will roll back over and head lower, but not TOL. Price action went sideways and became bullish at 11:15 am reversal time and finally breaking out by 11:30 am. This bullish pattern is called a "A gap that bullies", and is a very reliable pattern to trade. I missed the first pull back which moved up nicely, so I stuck around waiting for another setup and soon I was rewarded. TOL triggered a 5 minute buy right at 1:30 pm reversal time. I priced it for a 10 cent stop and I was looking for a nice clean 10 cent profit at the high of the day for TOL. My only concern was that we were 5 green bars up on the hourly chart with 30 minutes to go in the current green bar. TOL inched its way upward over a 30 minute period, by 20 minutes in the play, I thought TOL might not make it. A new hourly bar would be forming and the likely hood that the next bar would be red was high. On the last 5 minute bar price in TOL hit my target and my shares were sold on the offer @ .28 cents. A nice 1 "R"isk unit trade in TOL which I was glad to have profited because at 2:00 pm TOL headed lower as the hourly sell soon triggered.
TOL 10072013