Fascinating Intraday Action

Apr 15, 2008: 6:20 PM CST

As a trader, I thoroughly enjoyed today’s intraday swings and price action. Let’s take a closer look:

The day began with an overnight gap just outside yesterday’s range (just above yesterday’s high) and immediately filled, giving the first opportunity of the day for a high-probability trade.

When the ‘gap fade’ trade ended, one could have played (long) in the direction of the original impulse, which only gave a 50% move before reversing and breaking the lower trendline of a new bear flag pattern which terminated just above moving average resistance.

It’s impressive that the intraday low is formed at the termination (completion) of the ‘measured move’ of larger bear (and bull) flags, and this was indeed the case with this flag which actually spanned the intraday high and low.

The rest of the day’s action rotated within these ranges, turning back up in a ‘rolling bottom’ pattern which took price above the key moving averages (I would have expected more downside at moving average resistance. Price rejection of further downside laid the ground for shorts to cover and new longs to enter, providing a ‘pivot point’ or turning point for the day).

Price then surged above the averages and found scant resistance around yesterday’s close while forming a new bull flag which quickly got its ‘measured move’ before reversing down to find support yet again at yesterday’s close.

Price made a final push to the upside and formed a more manic bull flag which also achieved its target.

There were other opportunities in the action of the day that I haven’t highlighted (or else the chart would be full of annotations) so I suggest you print out today’s action and apply your own analysis based on your experience and insights.

As always, feel free to check out educational resources from INO TV (video education from top traders) and Market Club (analysis, trading signals, scans, portfolio, etc).

Be careful, as this week has been deemed an “Earnings Week!”


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