Thread: Regarding my call on MBI in the chat room today

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  1. #1

    Default Regarding my call on MBI in the chat room today

    Today in the chat room, I made some calls regarding MBI. Unfortunately I was working, so I couldn't watch this one as it unfolded. I am an intraday momentum trader, so without watching the time/sales as it happened, I can't say what I would have done. However, looking back at the chart and tape, I'd like to comment on the action. This is not intended to be didactic in nature, but rather an introduction to my trading style, since this is my first post.
  2. #2


    I'm not even sure if this the correct place in the forum for such a post, since it isn't about a future stock pick. I will never really post much about future stock picks since I pick my stocks in a window about 1hr before opening bell, and on throughout the day. I may watch a stock for a few days, and MBI is one of them right now, because it (they) tend(s) to make predictable intraday moves.

  3. #3


    My first observation was that it was a possible double top that could be shorted if it broke through support around the 12.50-12.55 area. After it rebounded off that support level, I noticed that it could be setting up for a nice decending triangle. From the chart above, you can see that that is (roughly) what it did. I believe I said that it could break support around 14:20 following the general guideline that a triangle breakout tends to occur around the 3/4 mark. Given that the height of the triangle was approx. .40, that would have been my target for the trade. Though there wasn't much volume behind it the breakout, I don't think it would not have been entirely unreasonable to enter the trade at this point. If I had entered at this point, I'd like to pretend that I would have been smart enough to get out of the trading as volume increased, and the price returned to go back within the triangle, but I'm not really that bright. My worst case stop would have been at the top of the triangle @ 12.70, which would have meant a .20 loss. At that point the stock actually broke out slightly through the top on high volume and on the 5min bar at my originally stated time of 14:20, but looking back at the tape, much of that volume occured with one really large trade at 12.61. Nothing very exciting occured outside of the triangle that would have had me in a long trade, especially one relying on the fact that MBI would go up to 13.10 (with the .40 target) with the market looking the way it was. At this point in the day, and pattern, it was still reasonable to think the stock had one last chance to sneak out through the 12.50ish support. It finally made a break on higher volume, and this time as it wiggled back into the triangle, it did so on decreasing volume, rather than increasing, and did not touch my worst case stop at the top of the triangle. It cruised on to the intended target at the 12.10ish mark, where it encountered a bit of resistance. That's the sort of place where I would exit 1/2 of my position, and let the rest run, using the MA(10) as a stop, until it hit another point of resistance, or, in this case, 15:58 or so since I don't hold overnight. At worst, if I took that .20 loss, and exited my entire position at the target of .40, it still would have yielded a .20 profit. With the position sizes I use, that is enough to easily cover commisions, and walk away with a bit of cash.
  4. #4


    This was a bit long-winded, and I'm sorry for that. I've been lurking for a bit though, and I figured it was time to introduce myself and give a bit of insight into my strategy. It's a very simple, and straight-forward strategy, and what you see above is pretty much it. I use only 1 screen, few indicators, real basic TA, and have a daily watch-list of 10-20. About 5 of those are stocks I watch for a few days because they're making preditcable moves, the rest I find through news feeds, and sometimes with a scanner during the day. It's simple but profitable, and I hope to contribute some useful calls to the chat room between the comments and conversations about squeezing babies' heads, and the color of urine and its possible effects on a car's horsepower (Clearly those were some "you had to be there" situations. Sucks if you weren't because it was very fascinating.)

    Feel free to comment or ask questions about my 20/20 hindsight commentary or strategy.
  5. #5


    Solid first post which I was able to learn from.

    Cheers and Thanks

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