Thursday, July 12, 2012

STZ: Trade Review NR7 with a twist.

STZ printed the narrowest range candle on Wednesday. The idea is , long this stock if breaks  28.88 which is Wednesdays high. Short the stock if breaks 27.45.NR7 means the narrowest range of the last seven days. For trending stocks narrow range often proceeds to range expansion aka break outs or break downs . Simply put buyers and seller become in equilibrium in narrow range . If buyers take control breakout happens vice verse if sellers take control. Good thing about narrow range is that it provides tight stop, which if know me is a must for me.
STZ was an a little exceptional where it did what it supposed to and shorts piled on only to see the stock breaks out later.Simple, when something doesn't go as expected , opposite happens. 

I traded STZ on Thursday from 27.98 , sold most at 28.89. Holding 1/3 for tomorrow.

Click on the charts to see details.

Narrowest day/ candle in last seven days. Text book says buy over Wednesdays high and short below  low.

Opens below Wednesday low and shorts piled in only too see stock changes direction.

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