The Closing Print live trading and financial blog during market hours.

Trade of the Day:

A new feature for members will be a trade setup for the day. These will usually be day trades or scalps. Sometimes we may have more than one to watch and trade. We can be sure that sometimes we may have a day of rest, with nothing to trade.

The criteria we are looking for:

  • The candidate is about to change trend
  • Stock should be trading at a reasonable value ($7 – $15)
  • We intend to scalp these candidates for a daily quota ($300-$500)
  • Indices should be bullish or sideways
  • If we are bearish, look for the opposite (i.e.; weakness)
  • We will risk 2:1 (example $10 stock, target +0.50 stop -0.25)

That said, let us analyze the industrial and materials industry group, where we see steel stocks in varying states of change.

U.S. Steel is trading just under the 200ma. Count the number of candles that push higher and close markedly above the 9/20ema on this 5 minute chart. Each attempt produces more closes, three at 2:00 PM and five just after 3:00 PM.

If this rhythm continues, we may see an opportunity in X. Look for 1) a large candle at the open, the a push higher or a flag into the rising (bullish SOTEMA). If this happens, we will talk through the scenario “LIVE”. We can enter with a stop below the flag or 9/20ema. Again, we will talk through this scenario.

X 5

STLD shows a descending wedge. I added “alpha” characters to emphasize what we are looking for as the “setup.” We have already changed trend on this time frame, while the daily persists in a bullish pattern. We would look for a continuation of the rhythm, push higher and flag. Repeat. We would take the first bullish candle propelling higher from the flag. Stop below the flag.

STLD

AKS is ready. Note point “A”, is where we are currently, with price about to emerge and stay above the 9/20ema. Look at RSI. We see a rising tide. That’s bullish and the barometer we will watch if this trade starts to work. 1000 shares has the potential to net $200 to $300 dollars in a scalp setup, if it materializes and the steel stocks start to move in unison. Again, we will talk through the scenario “LIVE.” Volume would be welcome.

AKS Scalp

CLF is showing a flag, just above the 9ema. Watch stochastic, as it should turn higher from here.

CLF

CLF 15minute chart shows a potential breakout. We do not want to trade the initial thrust. Instead, focus on the flag and follow through, which will tell us the trend has staying power. I’ll talk more about this during the “LIVE” broadcast. We could net $300 to $400 in a scalp setup using 1000 shares.

CLF 15

Scale these trades according to the size of your account. DO NOT use more than 20% of your funds in any one trade like this. There are risks of being stopped out and you’ll likely be more stressed if you put all your funds to work.

VALE 5 minute. Same thoughts here, continuation with an initial blast, followthrough and flag scenario. We trade the flag breakout, then raise our stops.

VALE

RYI same thoughts here. If we see all of these move together, that will add confirmation to our trade.

RYI

In summary, these “trades of the day” will be discussed “LIVE” before and during the opening range. There is no need to rush. However, we would suggest locking in your orders and save them prior to the opening bell. That way you can open the order screen and adjust as necessary, so you are not fumbling around and make a hurried mistake under stressful situations.

Remember team work rules; working together as a team provides us with the best scenario, when many eyes are focused on the same goal.

Good luck today.

Vinny



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