8th play – confirmation: back on track

balance: $2407.47

bought 63,000 shares of CHDT on 2/6/07 @ .023 and sold 63,000 shares on 2/7/07 @ .028 for a profit of $284.88 and a gain of 19.47%

new balance: $2692.35

total gain after 8 plays (%): 169.24%

this was an easy and straight-forward bounce play.  interestingly though, i watched it consolidate for forever!  first i told orange, “it’s going to form a cup and handle and bounce!”  it didn’t.  then i told him, “it’s gonna be done consolidating any time and run up.  make sure you’re watching!”  weeks and weeks of consolidating went by and i just watched the ADX trend further and further down.  there were times when i almost jumped in, but decided my trigger wouldn’t be until it broke .037 and it got up to that point but never broke — so i waited and waited.  finally it broke the side-ways trend!  but the wrong way…so i just laughed and waited some more until it looked to be oversold and showed signs of bouncing.  all stocks go up and all stocks go down, so it’s all about timing as i pointed out in one of my first posts.

well, it finally formed a doji and then a hammer, so i waited until the next day to see if buyers were ready to jump in.  they were, myself included.  the indicators looked to be rebounding from oversold and volume was lower than it had been the last couple days but was still fairly high against the average volume and probably meant that most of the sellers backed off.  i liked the direction the indicators were heading on the 3-month chart so i opted to stay in over night.  interestingly, after the market closed, another trader pointed out that the 3 and 5 day charts didn’t look so hot for a run to continue today.  he was completely right in analyzing the charts, but i was already in and i felt that this had more room to run (a gut feeling).  so it turned out we were both right because the charts didn’t look great, but to my delight it ran some more.  i opted to sell out about an hour before EOD because the MMs were playing games with the b/a earlier and i thought they might do it again at EOD and have it finish looking bearish.  well, i sold at the HOD which was good but it finished in a bullish white marubozu candle and closed at the HOD — you can’t win them all i guess.  nevertheless, it was a simple and quick nearly 20% so no complaints from my end.