Day Trading US Stocks Review 11-15-2010

I have picked out ABT, JPM and JNPR stocks for yesterday’s possible candidates for day trading the US stock market. JPM stock could attract day traders willing to trade long, while the ABT and JNPR stock surely had signals for a decline. I am now including screen shots of other timeframes inside the main stock graph for better understanding of the trading strategy. The time printed on stock graphs is EET, which means opening time is 16:30 and closing time is 23:00.


ABT stock continued the decline yesterday hitting new lows. The stock was a fine candidate for intraday trading when the stock price broke the support level of 48.45 an hour before the market’s close. If you traded the falling candlestick you might got worried when the next candlestick almost reached the previous high, but the stop loss would never been hit and you would have made more than 20c per share in less than 20 minutes trading on the 3-min graph. The risk for that trade was 8c per share if you were to short sell at the low of the red candlestick.


JPM stock probably wouldn’t be included in the watch list of a day trader yesterday, however it did offer an opportunity to trade intraday an hour after open. By looking first at the 3-min stock graph there was a promising breakout and a signal to trade long. The JPM stock price continued to go north in the next 10 minutes, forming an even larger green candlestick at the 10-min graph which marked another breakout, this time in the longer timeframe. The stop loss could have been defined at the low of the rising candlestick at the 3-min graph, but also at the low peak right below 40.00 for a safer trade. Regarding the exit point most day traders would trade out at about 40.35 mark, profiting 20c per share but the more risky approach would be to exit when the stock price failed to peak higher in the 1-min graph. In that case the day trader would trade out at about 40.50 or so, winning 35c per share. He could also close 50% of the position at 40.35 and sell the remaining shares at higher prices.


JNPR stock has been another US stock that could have been traded when a breakout happened in the 3-min stock graph. Once again setting up the stop loss at the high of the falling candlestick at the time of breakout would risk no more than 10c per share, while the continuously dropping high peaks at the 1-min stock graph would secure that you trade all the way down to 34.35, making almost 50c per share! The JPNR stock price could drift down to 33.00, the recent resistance level at the daily graph which has now converted into the support level for the 4-month uptrend of the stock. Although the trend is our friend, there are occasions such as JNPR when we can make money day trading against the trend. The tight stop losses at the 1-min and 3-min stock graphs will prevent from getting trapped in a resuming long term trend.