The Path of Least Resistance : Market review 5/16-17 2016

As day traders, so much of our attention is focused on the intraday pattern.  But the bigger time frame is always most important.  The more you zoom out the better.  Stocks move from support to support and resistance to resistance.  In order to get the biggest moves, you need to find stocks that have the most room until its next resistance if you are long or the most room until its next support if you are short.  

Here are a few examples from the past 2 days that I traded that has lead to great gains.

So going into Monday, I had NFLX on watch for a bounce.  Friday it held its previous low.  This gave me an idea to look for an intraday pattern for an entry, knowing that the stock had room until $90.

Above is how I played it and what I noticed to confirm my bias for a trade.  Notice how once the low held, it continued in an uptrend until its next major resistance (my target) of $90.

Before I show my next trade, take a look at the chart below and be truthful to yourself and answer what you think the stock would happen next. 

I would assume most would be thinking lower prices were in the picture.

Lets take a look at the overall picture now.  I had this on watch going into today 5/17/16 based on the fact it had some news and had a great 30 minute chart with room to run if it wanted to.

Above is the 30 minute chart entering today.  I had a bias if it broke 28 it had room to atleast $29

Above is the flag that I traded.  

And this is where it eventually hit a resistance it could not pass.

Next is MGT 

All this was, was a simple flag pattern.  Why was it so effective?  Check out the daily on this thing.  No noteable resistance to be found + a low float = explosive moves.

The most important thing to take from this blog, is this:  You have the best opportunity when you have the path with least resistance.