When To Give It Another Try

When you are stopped out of a trade for a loss, it stings.  It stings all the more when the same stock turns and races in the same direction as you were positioned.  Here’s how and when to look for reentry opportunities.

I posted TRMB as a stalk candidate just before numbers on 4 May 2014.  I then posted right after the company reported and the stock gapped lower.  For me, TRMB would be off the grid for the time being until it creates a new intermediate long structure (higher highs and higher lows), tests the structure and confirms it.  I would approach TRMB that way because that’s the overall trading strategy that has worked bests for me and because it helps me stay objective about whatever I’m trading.  I don’t fall in love with ideas.

That said, there are other ways to think about TRMB.  While at first glance, it has clearly broken near term support and, frankly looks like death…

simple trading

An expansion of the chart shows that the stock is still well above the Major Uptrend line and, in fact, found good support around the Intermediate Uptrend line.  In fact, the 3 day chart below shows that price bounced right at the Previous Relevant High (PRH) which now represents a pretty good area to expect to find support.  The longer term chart also makes it clear that the recent run from the low $30s to nearly $40 was likely a parabolic move which in turn makes it entirely possible that this drop is nothing more than a regression to the mean.  If that is indeed the case, then price should soon resume its upward trajectory even if it is a bit more deliberate an ascent.

simple trading

I neither have nor plan to have a position in TRMB.  But if I were looking to get involved, I would look to enter on lower timeframe long setup(s) with tight stop(s).