TRADE LESSON: EXTENDED MOVES CAN LEAD TO GOOD TRADES
It is very important to watch for stocks on all time frames that get extended from the 20 minute moving average. Today NVDA gapped higher on the day and became very extended from it's 10, 20 , and 60 minute moving averages. This tells us that the stock must pullback or stall at these levels. The next step is to find the strong resistance level. This can be accomplished by moving to the higher and usually more dominant time frame. Therefore, in this case we scan the daily chart and see a double top resistance level at 16.50, Since at that level NVDA pulled back around 0.75 cents. This is a very good risk/reward intraday scalping opportunity that can be found on a daily basis. Remember always use stops, as markets can do anything at anytime.
Chart Here:
http://inthemoneystocks.com/userfiles/image/nvda%20trade%20lesson%2012_7...
