Thursday, October 18, 2012

Thursday evening


Sometimes, discretion is the better part of valor.
Be careful out there.

Intraday update

S&P futures are grinding back up to the highs here.... although there are some big sellers sitting on the offer around 1457-1458. VIX is probing under 15 a bit... and the Naz and Russell futures are lagging.

Sounds like a nausea treatment but may trigger motion sickness.

Gator's Chart of the Day: MLNX
Mellanox Technologies Ltd. reported after market on Wednesday and they beat estimates on impressive revenue growth BUT the stock sold off hard during the conference call.  (I did not listen nor read a transcript.)  The red support line indicates how far the stock dropped (69.45) and the green line indicates where has settled in (79.50) as of 7:30PM EDT.  This one has 59 Minute Trade written all over it.

MLNX was Rev's SOTW a few weeks ago and that's when I first heard of it.  It's an Israeli company that designs and markets extremely high end switching components for Web 2.0 and "cloud companies."  Mellanox has an extensive product line but the Infiniband systems get the most attention.

Some of our traders were in this one Wednesday night and reported doing well (nice trade, relic) but I think there is a lot more action ahead.  Both stock and option traders should see plenty of liquidity to craft trades.

The Basic 59er Trade
You know the drill by now.  Wait for a green candle on a 3 (aggressive) or 5 minute chart and make your initial buy.  Put your stop under the low of the day because this trade assumes it will not touch that low again. 

Feel free to add quickly if the stock is moving in your favor but each successive add should include a stop that will keep you from getting hurt.  The 10 day average volume is about 810,000 shares but Thursday should see 3 or 4 (or more) times that number

For adds and stops I think sysin3 gave excellent advice on 10/11.  I certainly can't say it any better so I'll just put a link here for you to follow.  http://algofighters.blogspot.com/2012/10/stops-part-3.html