Monday, June 23, 2008

Trade Entry: TRA

I bought 500 shares of TRA at $53.12.

Setup: A combo platter of a breakout and trend-pullback and entering within a forming high and tight flag. I expect a continuation of the trend. Great volume pattern and RSI and stochastics confirm price highs. The stock is under accumulated here.

Risk: My intial target is the recent high at $60. My stop is just under the forming consolidation area.

Concerns: No doubt, the stock (and sector) is overbought. However, momentum and volume are so strong that I'm betting the trend will continue.

2 comments:

Kevin H said...

Is this going against your trading plan? I don't usually see you pick stocks this overbought.

BTW, good call on ANR. It's up almost 100% since you called it two months ago.

Eochaidh said...

Hi again,
I was following TRA around the 17th June but it didnt behave as I hoped for. The risk to reward at the time was around 1.2:1 which I think is too low. Even now, I see the stop around $49.8 and the target around $56-57. The R/R if youre in at 53 is around the same, 1.2:1! I would consider that risk too high and would not trade it. Do you mind me asking what kind of R/R you try to play with? I try to avoid less than 2:1.
Many Thanks!