$Making it While it’s Obvious

National Oilwell Varco, Inc ($NOV-oil/natural gas equipment company) opened the day down .19c from the previous day’s close.  A brief history, the day before I had been trading it long after a pullback from a break of an important resistance spot. It never bounced and I ended up losing money on it that day as the SPY sold off from the 120 level. So today when it gapped down I was ready for the short and to get my money back!

I waited for the first 15 minute candle to form, which had a range of .66c! Over half the average true range of the stock. I shorted on a pullback in the next 15 minute candle. My entry signal was a swing high on the five. I entered at .38c and covered at .12c as the stock was pausing and the market failed to make new lows.

This trade, unfortunately was my last profitable trade in the stock. After making the first trade, I said ” I just got my money back,” to my boss sitting next to me. And perhaps this why I did not make another profitable trade in this stock for the rest of the day. It was personal and I didn’t want to lose. This not a way to make big money, because you miss opportunities.

So the rest of the blog is about what I wanted to do and should have done and easily made another .50c, without much sweat. Just wanted to give full disclosure on that.

5 minute chart of NOV on April 13th.

I tweeted about going short NOV below 42 and waited for it to sell off. I saw a level from the previous day hourly at .96c, that I thought might have some significance. Apparently not as the stock broke the figure and shot to .94c. I hesitated as it bounced, wondering if it might be a fake out and afraid it might just bounce right in my face. I should have hit the bid the moment it broke.

As you can see from the chart it did nothing but go down. I entered a few breakouts along the way, but just felt that hiding around the corner was the support level. So I exited most of them prematurely. The closest support I saw was .66c, which was the low from a few days prior. It pushed right through that level and found support at .52c.

Hindsight of course is always 20/20. The original short I could have held for .88c, without ever being out of the money. I am such a “lock in the profits” personality that I have to make sure I stay aggressive while the situation is obvious. So if I get out, I must reenter.

The market has really not followed through to the downside and all selling pressure has been met with buying. However, I have to trade the charts and the setups, because when they do work out I need to be making money. I don’t get paid just to watch stocks do what I think they will do!

This has definitely been a challenge that I have been working on lately. Making sure I get involved in the right set ups, yet still finding the balance so I am not over trading. That’s all for now!

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