Shorting Rounded Tops
Played MDRX on the long side than the short side today. MDRX had negative news on earnings and had a huge gap down. GMAN said that the stock was holding the $9 level. My entry was @ 9.25. The price was above the 9EMA and 20 SMA and flagging. Sold a quick 1/2 @ 9.50, and 1/4 @ 9.82. I added another position when the stock broke the HOD @ 9.87. Sold a quick 1/2 @ 10. I meant to place my Stop @ 9.85 but placed it @ 9.90 (ITrade's new platform sucks) and got wicked out, or I could have enjoyed the nice run to 10.50!!
The stock topped out @ 10.51 and started forming a rounded top. I shorted at 10.32 (previous level) for a quick gain. 1/2 @ 10.12 and 1/2 @ 10.28. Once the price action broke above 10.24, the trade had reversed and exited. It made a lower high and came back to the same level. I shorted at 10.29 this time, but there was no follow through and exited for scratch.
Here are the 1 minute and 5 minute charts. I saw the trade much better on the 1 minute chart.
I noticed the rounded top as a result of a conversation I had with my buddy @Ktrades this week as we were discussing price action. Thanks!!!
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