Thursday, April 2, 2009

Quick Note and Limit Order for BGZ

This morning is set for a large gap up (around 2%) in the stock indexes. The short-term model is near overbought after yesterday's gain. With any strength after the open, last weeks highs would be exceeded. I would definitely be wanting to bet against this rally on new highs.

So I would like to see how things go in the morning and see if the short-term model will register any extreme readings before recommending a trade, but I have decided on a limit order to place to potentially buy BGZ for those of you who have very little time during the day to enter orders or check for an update on the blog. So here is the recommendation.....

Place a "day only" limit order to buy BGZ at 55.00 with half the normal dollar amount devoted to a trade and an additional limit order at 53.00 with another half-sized dollar amount.

Those orders would require the market move above last week's highs a bit and would likely result in the short-term model becoming overbought or very close to it.

To reiterate on previous posts here, this trade would be intended for a multi week holding period, though it is unlikely to hold beyond June. I think any push to new highs here may be the highest point the market reaches before making new bear market lows and then some.

Now let's say that the order gets filled and the market drops and everything goes as planned, I will still be looking for good short-term trades to make in future weeks for those of you who want to continue trading the smaller time frame type trades as well. But for those of you who may be using the "cumulative" method I had mentioned for account management for these trades, I would make this BGZ trade and just stay posted over the next few weeks for any trade management type posts on stop placement or trade exit if the market does not begin to accelerate down as expected.

I will post later today if/when the short-term model becomes overbought to suggest entry for any traders not wanting to use the above limit orders for whatever reason.


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