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Gap closed, Stochastics down --> $340 profits

5 min Emini Nasdaq 100

Hi,

Market gapped up by around 3 points and for the first 5 minutes it made a desperate attempt to go higher. Why desperate? You can see that with the long upper shadow for the red candle for the first 5 minutes. Price then closed the gap and momentum appeared to be pushing it down... Stochastics went from overbought region to cut below its signal line. This was enough for me to short 1 contract at 1947 and another 2 contracts at 1945...

Notice that my trade was confirmed by short-term MACD and mid-term MACD cutting the signal line.. I held my position until 1940 when stochastics started to turn up and price bounced off the moving averages.. profits of $340.

Posted by Michael Taylor on August 23, 2007 8:00 PM |

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