Nanogen, 30-minute Chart

Questions:

1) Why would you be paying attention to this stock on Thursday, December 4?

2) Is the trend up or down? Would you be looking to get long or short this stock?

3) Where would you get long/short this stock on Thursday, December 4?

4) Where would you put the initial protective stop?

5) When would you stop trading for the day?

6) Where would you exit the position?

Answers:

1) Because it was unusually active, and very volatile.

2) Up. You’d be looking long.

3) Long at 5.89 on a buy stop above the 10:30 inside bar.

4) Initial Protective Stop: 5.70. (max. 3.23%)

5) Right after you enter the position or lunchtime, whichever comes first.

6) End of day. Could sell half, carry half, or just close it all at once.

The sentiment was positive in the morning so I was looking long. And once again the sellers came out after lunch and drove most longs down into the close.

NGEN gave a nice spot to get in with fairly small risk; 2500 shares was a good size position to put on given my risk tolerance. And just like the previous day, the 11:00 AM bar was an expanded range “blast off” that allowed me to tighten the protective stop quickly.

The stock closed at $6.15 (I sold a bit above there) for a gain of 4.41% from entry, which was pretty darned disappointing considering it had moved nearly 20% above the entry in the morning. Reward to risk was lousy from the initial stop, but decent from the tightened stop.

I thought it was going to be a big day expecting a close around $7, but it didn’t happen and I have to be content with the relatively small gain that I got.

Screen capture of my intraday Watch List: