X long based off, surprisingly enough, fib extensions
I'm day trading full time now and, being much busier, have fallen out of the habit of posting my swing ideas on here. By way of apology, here's my analysis of my favorite trade I've made in the last few months.
US steel has had a good run over the last four months, moving an average of 7 points a month since June of this year after 3.5 years of accumulation. I picked up X long in my swing portfolio when it broke 33. I sold out of it at the 40 psychological resistance level, quite happy with my seven points. As it turns out, maybe I shoulda held onto it for a little longer.
The question on all the funny mentalists minds is: when will this rally end? Coincidentally enough, I've been wondering the same. I mean, look at that month chart. Ain't it about time we put in a red bar? Maybe.
Now for the reason for the fibs. As i was doing my price action levels, I noticed a trend as I went from month to week to day, looking at the 2011 timeframe: my levels looked a helluva lot like fib levels. So I traded out my median around 41 for the fib base and ran the upper bound to 64, the peak from February 2011 and area of major distro in 2010. Lo and behold, all the levels were almost 1:1 with mine. Freaking neat.
Where from here? Think of the momentum this name has. We've put 20-some points on the board in four months. We're coming off of almost four years' worth of accumulation. So I'm thinking to 52 before we see a retracement, and I don't think that's gonna be a big one...maybe three points and then sideways for a while. I plan on buying a handful of nov14 50 call contracts and one or two 40 puts to hedge. The market is choppy as hell right now and I strongly recommend strangling any long you decide to take.
US steel has had a good run over the last four months, moving an average of 7 points a month since June of this year after 3.5 years of accumulation. I picked up X long in my swing portfolio when it broke 33. I sold out of it at the 40 psychological resistance level, quite happy with my seven points. As it turns out, maybe I shoulda held onto it for a little longer.
The question on all the funny mentalists minds is: when will this rally end? Coincidentally enough, I've been wondering the same. I mean, look at that month chart. Ain't it about time we put in a red bar? Maybe.
Now for the reason for the fibs. As i was doing my price action levels, I noticed a trend as I went from month to week to day, looking at the 2011 timeframe: my levels looked a helluva lot like fib levels. So I traded out my median around 41 for the fib base and ran the upper bound to 64, the peak from February 2011 and area of major distro in 2010. Lo and behold, all the levels were almost 1:1 with mine. Freaking neat.
Where from here? Think of the momentum this name has. We've put 20-some points on the board in four months. We're coming off of almost four years' worth of accumulation. So I'm thinking to 52 before we see a retracement, and I don't think that's gonna be a big one...maybe three points and then sideways for a while. I plan on buying a handful of nov14 50 call contracts and one or two 40 puts to hedge. The market is choppy as hell right now and I strongly recommend strangling any long you decide to take.
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