Crazy busy day with work will be up past midnight till Wednesday early AM….Two paper trades on Tuesday -.33 gross, -.36 net.

LNC-.10 LONG ~ Right idea as this stock made a +$1 move mid-morning but my entry was too early. I longed at the the bottom of the opening range – which I thought would act as support, instead it broke through it a .30 cent red five-minute candle, stopping me out. I did not enter on very low RSI (2) and nor did I follow my rule to get in after a tall green candle crosses back over above the 10 SMA on the 1 minute chart (after the typical morning pullback). More importantly, LNC crossed over $6.50, and typically at a threshold it will test that cross at least once. After it pulled back one more time to $6.50 that would of been a nice place to long all the way up to $7 at least.

EAT -.23 LONG ~ This one I simply chased, I bought on a tall wick that ended being the morning top. EAT broke through opening range support, and the bounce I chased would of been a perfect short entry (sell on the pop!)

Now if you look at the charts of LNC and EAT on a time frame above 5 minutes, they look identical. How am I supposed to know LNC is going to bounce and EAT is going to drop with the charts looking the same after both of them gapped up? There may of been a fundamental and/or a sector driven reason but I’m not sure.

Probably a better question would be: Will LNC bounce or fail at $6.50 and will EAT bounce or fail at $17 ~ and then act accordingly. Both those round price thresholds were around the bottom opening range support for both stocks. Both of them crossed these marks twice – LNC held above, and EAT below.

Anyway, I think stocks that gap up or down have some basic patterns that can be played once you learn the rhythms.

For Wednesday, some repeats:

Symbol Last %Chg Vol ADR Open High Low
YGE 6.31 -12.97 5.5 Mil 0.79 6.9 7.69 6.11
CZZ 4.65 12.59 6.6 Mil 0.55 4.14 4.69 3.59
LNC 6.89 7.99 24 Mil 1.04 6.85 7.89 5.81
EAT 16.85 3.69 9.1 Mil 0.87 18.14 19.01 17.27
MAC 8.95 -8.67 3.3 Mil 1.54 9.54 11.08 8