Stock Selection Information
Actavis to Acquire Warner Chilcott in $8.5B Transaction; Price is $20.08 per Share
Watch List Reason - Relevant news on the stock.
Pre-Market Volume - 15%
Trading Plan - To go long above 19.50
Management
Entry Setup used: Consolidation above support
Trading Comments
The stock gap higher and sold off right before the market opened. When the down trend was broke, and stock start to consolidate at the 19.50 level we started looking for long entries.
The tape reading skill was fundamental for this trade. There was a fight between the 19.50 seller and the 19.48 buyer. Every time it drops the 19.48, immediately we could see the buyer stepping up again. As soon as the 19.50 seller was done, prices moved up.
The plan was to add to the position as soon as the 19.59 offer appeared and so I did.
The tape reading skill was fundamental for this trade. There was a fight between the 19.50 seller and the 19.48 buyer. Every time it drops the 19.48, immediately we could see the buyer stepping up again. As soon as the 19.50 seller was done, prices moved up.
The plan was to add to the position as soon as the 19.59 offer appeared and so I did.
Evaluation
It took me a couple of stops to get the right time of the trade, but that´s just how things work. The plan was to get in at the consolidation, cause as soon as the seller was done price would move fast up (as it did). Did a good job there.
Adding to the position as it start to work was a great thing, cause it allowed me to control my risk pretty well. I followed my plan to take profits fast and to close the position at 19.80 but I must adjust this plan. The correct response would be to take profit at 19.75 and to hold the core for the final target at 20.00. I did not believe it would get there, but it did.
Even with the mistakes it was a great trade.
Adding to the position as it start to work was a great thing, cause it allowed me to control my risk pretty well. I followed my plan to take profits fast and to close the position at 19.80 but I must adjust this plan. The correct response would be to take profit at 19.75 and to hold the core for the final target at 20.00. I did not believe it would get there, but it did.
Even with the mistakes it was a great trade.
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