16 March 2010 - Capitaland

This is the story of a man they call the King of Volume Trading.

The DOW was up, and he knew it was a sign that the homework we did the day before was wasted... With the intel useless (that is why we should always do homework when the DOW closes, or at least do revisions in case it turns around), all he had to depend on was his gut instinct - the same primal senses he's been honing throughout his years of trading.

"Look for the gem among the chaos," he told me. (Or something to that extent anyway). Them wise men always have corny shit coming out of their mouths.

So he did.

There are a few signs of a run:

1. High Intensity following days of low Intensity
2. High Intensity happens at the upper regions of the stock's ATR
3. The stock range for the day exceeds the previous days'

"It's time to take Capitaland," he said this time, less cornily.

And so we did. In the nature of a sensible blog, I will now attempt to decipher what the hell happened in the minds of the trader:

The past two days have been shit - no run up like everyone expected, leading to a few days of mid-level sell-offs by contra-traders. The shortists have been making a little off the intraday Fourth Rule patterns, but they were waiting patiently for the exhaustion and the eventual drop downwards. Monday was dreadful as everyone was waiting for something to happen.

Seesaw, and everyone turned to the DOW. It went down at first, and the shortists rubbed their hands together and went to bed (that was me and Shifu Ang), prepared to take down the stocks a few notches the next day.

Morning came, and DOW turned as green as Oscar the Grouch on a good day. The shortists curse their luck and watched as the contra buyers prepared themselves for a second spring. Intensity picked up at the end of the day, and the rest they say, is a good tomorrow.


The Breakdown:
Charts from Yahoo Finance and Chart Nexus.

Fig. 1. Capitaland Intraday Chart, 16 March 2010

Remember the lessons of Intensity. If fate has it, we will never see our taking price hit tomorrow.

Run, run, run like freakin' Forest Gump!

Capitaland
Opening Price: $3.92
Previous Volume: 8,550
Closing Price: $3.40
Closing Volume: 15,600

Price Acquired: $3.96
Lots Acquired: 5
Break-Even Price: $3.99

The Call: Run. Run. Run! To sell on low Intensity.

For the interested, here are the other charts:

Fig. 2. Capitaland 5-Day Intraday Chart

Fig. 3. Capitaland 3-Month EoD