Buy the Lower Open | Game Plan | June 5

Buy the lower open should be your game plan for the day. Economic numbers aside, its the correct play in a bull market.

There will be days when you do the right thing and lose money, you can’t focus on the one or two days you don’t get follow-through.

We are after probabilities over the long-term, not trade-by-trade or day-by-day. Today’s best plays will be strong stocks with a weak close yesterday.

Look for a spot around yesterday’s low to bid or an inside day breakout. Day traders have been frustrated the last few weeks but if you were patient and didn’t over-trade, you should have earned net profits for the week yesterday. There was a lot of clean follow-through.

There are plenty to choose from below.

Stock Market Indecision: Map of the S&P 500

buy the lower open

Day Trading Game Plan: The SPY

SPY finally broke the pattern of indecision on good volume.  A clean dollar of trading profits on the short side once it closed below the open price. The correct trade is to buy the lower open @ $209.75

spy day trade

Buy the Lower Open | Stocks to Trade |Friday June 5, 2015

Pete’s Notes:

  • Plenty of trade set ups on both sides of the tape.
  • Semiconductor stocks giving us a pull back finally
  • WYNN and LVS bottomed as we discussed a few days ago. Looking for a spot to short.

Interesting Chart Lessons:

  • UA (below) almost a month of consolidating, 4 tight days recently, looking for a trend day.
  • SNDK consolidation back on the list

jobless claims in focus

Earnings in play today > 1M avg shares:

Bullish Ideas ATR/Volume/Price: AET, AMZN, CTRP, FEYE, GILD, GPRO, GS, HLF, NFLX, NXPI, RCL, SWKS, TSLA, YOKU

Bearish Ideas ATR/Volume/Price: aal, gmcr, kors, rrc, nsc, ual, mon,

Weak Stock Weak Close: aal, cenx, chk, cpn,

Strong Stock Weak Close: CIEN, FEYE, GT

Weak Stock Strong Close: ntap, kors

Strong Stock Strong Close: AEO, KBR, MYL

20 day Breakdown: a, cpn, gsk,

20 Day Breakout: DTV, T

2x Normal Volume: TMUS, LNG, WY, DOW, FEYE, CCI, LVS, WYNN, CIEN

Watch List Longs: DOW, AET, SBUX, PRU, JPM, EBAY, M, INTU, DOW, MYL, LRCX>84

Watch List Short: chk, hal, cop, xom, all, cost, trv, vlo, ko, luv, ntap, dd, klac, gsk, stx

Inside days: C, COG, AIG, SCHW, USB, MET, YOKU, MCD, M, PRU, GS, ETFC, AMTD, YUM, QIHU, TOL, FAST, TTWO,


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Leave a Reply 6 comments

Passion4Trading Reply

“Today’s best plays will be strong stocks with a weak close yesterday.”

I think you mean “with a STRONG close yesterday” Pete for HIGHEST ODDS.

Relative strength names over the long haul prove themselves in opportunities like yesterday when the overall market is weak….yet they are resiliently able to close stronger than a benchmark such as SPY.

Hence these names then should move farther and faster in a general market that has found a location on weakness to reverse.

Conversely– if a “strong stock” closes merely with or even worse– “weak close” relative to the market– this can be a cautious sign something may be changing in that “strong” stock.

    Pete Renzulli Reply

    No
    That is NOT what I meant.
    I am looking for strong stocks with a weak close to buy a test of yesterday’s low.

      Passion4Trading Reply

      So when u say “weak close”… do u simply mean near the low end of its range…WITHOUT any regard for whether it was RELATIVELY WEAK compared to how SPY closed?

      Let’s say SPY closed near the upper end of the lower 1/3rd of its range… but the “strong stock” name closed on a solid red candle on volume at its low of the day… u don’t want to be looking for a test and entry of that low do you Pete?

      Conversely– lets say SPY closes red at low. The strong stock closes negative– but near the upper end of its lower 1/3rd range. Within it is a “weak close” because its in the lower third– but very Strong relative to SPY. THESE ARE THE STOCKS WANT TO BUY ON TEST OF LOWS NEXT DAY– NOT THE RELATIVELY WEAK NAME.

      Agree? If not- can u please expound?

        Pete Renzulli Reply

        Hi
        I am referring to a strong stock with a close near the low looking for it to hold the previous day’s low as support for a spot to bid.
        Thank you for you question
        I hope that helps.

Ken Busch Reply

Great calls Pete with EBAY and FEYE!

    Pete Renzulli Reply

    teamwork Ken
    the Game Plan meetings are producing some great ideas.

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